We recently added short HAIN to the Hedgeye Best Ideas list.
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Conference Code: 181449#
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TODAY, AUGUST 14th @ 1PM
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:
- 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