We are adding SHORT Hain Celestial Group (HAIN) to our Hedgeye Best Ideas list.
We will also be hosting two conference calls focused on the organic space of the food industry next week.
1. Thought Leader Discussion
The first conference call will be an expert call on Tuesday, August 12th, 2014 at 1pm EST and will feature guest speaker Bob Burke, Principal at Natural Products Consulting Group.
Since 1998, Bob Burke has provided assistance in bringing natural, organic and specialty products to market across most classes of trade. This includes work in strategic planning, writing sales, marketing and business plans, building distribution, broker selection and management, organizational development and compensation, strategic options, financing, branding, trade spending and assistance around M&A, due diligence and venture strategy groups. He is also the co-author of the Natural Products Field Manual, 6th Edition and The Sales Manager’s Handbook. Prior to consulting, Bob was with Stonyfield Farm Yogurt for 11 years as Vice President, Sales & Corporate Development.
During the call, Mr. Burke will focus on:
- The state of the organic industry
- GMO labeling and its impact on the food industry and supply chain
- Thoughts on publicly traded organic stocks
2. Best Idea Call
The second conference call will be a Best Idea call on Thursday, August 14th, 2014 at 1pm EST.
The organic food industry is the only place in the consumer staples sector that investors can find real growth. That being said, the last five years have been great for organic stocks – especially HAIN. The past 12-months, however, have been more challenging with evidence mounting that industry headwinds will keep some stocks within the organic segment under intense pressure. With HAIN being the 700 pound gorilla in the room, it has the potential to feel the most pain.
We’ve recently seen early signs of maturation in the organic segment of the food space. This is despite several companies seeing above-average organic volume growth.
Our call on HAIN will focus on the following issues:
- Organic segment maturation
- Acquisition fatigue – the “roll up” story is looking tired
- Brand management and lack of disclosure
- Slowing top line trends
- Margin pressure
- Signs of financial stress
- Positive sentiment
- Frothy valuation