Thursday, January 2, 2014

"Everyone starts out the new year making resolutions to become more healthy. The Hain Celestial Group, Inc. (HAIN) has made a big business out of eating healthy, and the trends seem to be moving in their favor."

Dow Jones Industrial Average 16,478.41 (UP) Week ending 12-27-2013

 Happy New Year. Warren Buffett says that you should not invest in things that you do not know about. Well, I went to a brunch on New Year's day and there were extensive conversations about "organic" and "sustainable" foods to eat, and even discussions about "antibiotics" and "fertilizers." So, although I have no expertise in this area, evidently everyone else in the world has been studying this subject intensively. How does this shake out into an investment opportunity?

According to Clare O'Connor, Forbes magazine Staff, in her August 12th Forbes article,            "$3.5 Billion Organic Giant Hain Celestial is Whole Foods' Biggest Supplier".

Link to Clare's full Forbes article .

Clare also mentions in her article that "the company counts famed activist investor Carl Icahn as its largest single shareholder, who owns just under 15%."  (Icahn did move his position over to Jefferies LLC in September 2013).  OK, so now you have peaked my interest.

The Hain Celestial Group, Inc. (Symbol HAIN, $89.38) is a company that has a one year rise of 68.89% in stock price for the trailing 12 months. This would juice up any portfolio's health.
HAIN is one of my "14 for 2014" stock picks.

Earnings per share diluted year over year was 62.86%. The PEG ratio on the stock, that is the formula of "price/earnings to growth ratio", is 0.765. This is well under my top end threshold of 1.50 PEG ratio, so to me, this stock price is inexpensive compared to its growth.
The ROE or Return on Equity of the company is 11.02, which is a little below the 15% ROE that I like to see, but with Carl Icahn involved here, that number will likely improve.

The 2013 earnings per share are projected out at $3.02 per share and the 2014 earnings per share are looking like $3.48 per share. Revenues for the company for the year 2013 were 1.852 Billion so this stock is a "Baby" Mid Cap stock and should have plenty of growth ahead of it.

The Market Capitalization on the stock is $4.283 Billion, so it is sized correctly if a suitor like Whole Foods Inc. had an interest in acquiring it. The Enterprise Value of the company is $4.871 Billion. The current forward PE on the stock is 25.55.

Insider purchasing looks favorable with more purchases than sells. Analyst ratings are 15 BUY recommendations and 3 Hold recommendations. The Current Ratio for the stock is 2.10 to 1.

There are 47.79 Millions shares outstanding of this New York based stock.  

"Bjork hitch-hiking with Teddy bear"

So if you need to hitch a ride this year with a stock that is going to take you a long way, Hain Celestial Group is probably a good way to go. Wait until things settle out a little bit in these first two trading weeks of the market year.



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