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Hain Celestial Group Up 14% in Six Months: More Room to Run?


Shares of The Hain Celestial Group, Inc. HAIN are riding high on optimistic fiscal 2018 view, strategic initiatives and worldwide expansion initiatives. In the past six months, the company’s shares have gained 13.9%, compared with the industry’s decline of 8.6%. Hain Celestial has a VGM Score of B and a long-term earnings growth rate of 13%, making us confident of its inherent strength. Let’s delve deeper and find out driving the stock.

Catalyst Driving Stock

With an extensive portfolio of well-known brands, Hain Celestial offers investors one of the strongest growth profiles in the industry. We believe that the stock is poised to surge as the economy gradually recovers and demand for natural food and personal care products categories improves. Rise in consumption, innovative marketing, diverse brand portfolio and expanded distribution are aiding the performance.

During the fourth quarter of fiscal 2017, the company completed two strategic acquisitions. Hain Celestial revealed that one of its wholly-owned subsidiaries acquired England based, The Yorkshire Provender Limited. Founded in 2007, Yorkshire Provender prepares superior soup brands, with its products being sold to major retailers, on-the-go food joints and other food service providers in UK. Hain Celestial is likely to benefit from this deal, as it will enhance its soup offerings, alongside leading to infrastructural growth.

Moreover, Hain Celestial Group also acquired Portland, OR, based firm, The Better Bean Company. The Zacks Rank #2 (Buy) company, which began a strategic review under Project Terra in fiscal 2016, anticipates generating worldwide cost savings worth $350 million through fiscal 2020 (comprises annual productivity). To achieve the savings, the company intends to optimize plants, co-packers and procurement, along with rationalizing product portfolio. Further, it plans on reinvesting the additional savings through brand development and household penetration.

Earlier the company had announced that in an attempt to augment sales and margin growth, it plans to create five strategic platforms in U.S. segment, including Fresh Living, Better-for-You Baby, Better-for-You Snacking, Better-for-You Pantry and Pure Personal Care.

Other Stocks to Consider

Other top-ranked stocks which warrant a look in the same space include Darling Ingredients Inc. DAR, Lamb Weston Holdings, Inc. LW and Mondelez International, Inc. MDLZ. All these stocks carry the same rank as Hain Celestial Group. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Darling Ingredients have gained 12.9% in the past six months.

Lamb Weston Holdings has reported better-than-expected earnings in the trailing four quarters, with an average earnings beat of 11%.

Mondelez International has an impressive long-term earnings growth rate of 11.2%.

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