Sky's the limit for Hain Celestial
Its high-end health food and natural products will benefit from the overarching trend toward eating better and fighting obesity.
By Jim Cramer, TheStreet
Who is bullish on their American prospects these days? Who is unrestrained about the opportunities here? I have found one company, one company that has more demand than it can handle -- besides Apple (AAPL) -- and that's Hain Celestial (HAIN).
A series of meat and egg recalls coupled with the overarching trend toward combating obesity has got this company on a multiyear growth path, even as people somehow think it can't shoot straight.
Hain makes all sorts of high-end, healthful, organic products, including teas, snacks, baby food and cleaning supplies. In each case, it distinguishes itself by ethos: It won't produce something unless it is best-of-breed good for you. That is why it has more than 1,800 stock-keeping units in Whole Foods (WFMI), which itself is doing phenomenally well.
The trend toward food that is good for you is one of the great themes of this era -- it extends to outfits like Chipotle (CMG), which is like the Good Housekeeping Seal of Approval of restaurants. Hain is bankable because if a stock in the cohort falters -- as many had bet that Hain would this quarter -- you can buy it lower if it misses.
What I think most people may have missed in my interview with Irwin Simon, Hain's very smart CEO (whom Wall Street is somehow not comfortable with, though I sure am), is the push into schools. New York is going to rip out the bad stuff and put in the good stuff -- natural foods -- to fight obesity. The city is willing to lose the revenue from the devil's bargain of soda and snacks and put in Hain's products to win the obesity battle -- one that schools have been on the wrong side of. I think that move can set the trend.
I also think that the push into China, where people go to KFC now because of its American (not Chinese) standards, will be a huge additive business starting in 2012.
Looking for something that hasn't been a dog during these dog days? Go read the conference call for Hain Celestial -- not the research, which is uniformly negative -- and get comfortable as this horrible market puts pressure on every stock pretty much every day.
At the time of publication, Cramer was long Apple.
P.S. Click here to learn how to follow Jim Cramer’s trades for his Charitable Trust.
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.
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