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Here's Why Hain Celestial (HAIN) is a Solid Investment Pick
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Shares of The Hain Celestial Group, Inc. (HAIN - Free Report) have appreciated 62.1% over the course of a year, thanks to its robust strategic endeavors, including transformation strategy. The transformation plan is aimed at simplifying portfolio, identifying additional areas of productivity, driving top-line growth and improving cash flow. Moreover, the company is focused on its global strategic goals and continues to make marketing investments in key brands. These endeavors have aided the Zacks Rank #2 (Buy) stock outperform the industry’s rise of 2.3% in a year’s span.
Let’s Analyze Closely
Apart from making investment in core brands, Hain Celestial is on track to simplify business to focus on areas with high-growth potential by exiting non-core assets. Progressing along such lines, management recently divested the company’s U.K. fruit business, including the Orchard House Foods Limited operations and associated brands, to a U.K.-based private equity firm Elaghmore. We note that the company’s fruit business was affected by the coronavirus pandemic. During first-quarter fiscal 2021, the foodservice-oriented fruit business continued to be weak as several offices and restaurants were shut or had limited service. Also, the fruit business caused a 270-basis points drag on overall international adjusted EBITDA margins during the first quarter of fiscal 2021.
Notably, the latest divestiture resonates well with the company’s strategic transformation efforts, further simplifying its brand portfolio. This divestiture will also boost the company’s international growth profile. In addition, this will drive the company’s overall adjusted EBITDA margins.
Other divestitures include sale of its Danival business in Europe, the Rudi's Gluten Free Bakery TM and Rudi's Organic Bakery brands. Earlier, management sold two loss-making brands, SunSpire and Arrowhead Mills. Moreover, the company concluded the sale of its entire equity stake in Hain Pure Protein Corporation, which incorporates the FreeBird and Empire Kosher businesses. All these divestitures have been simplifying the company’s portfolio and driving overall growth. In fact, by exiting smaller and non-strategic brands, Hain Celestial is able to reduce supply-chain complexity and redeploy resources toward bigger growth opportunities.
Furthermore, Hain Celestial’s robust initiatives include product innovation, marketing and optimization efforts to fuel top-line growth. Management is also on track with boosting automation capabilities in plants, rightsizing infrastructure, redesigning engineered products, and optimizing pricing. In addition, it targets strategic acquisition opportunities, which is likely to result in incremental sales along with providing the company a strong foothold in the packaged food and grocery market.
More Facts Highlighting Strength
Despite pandemic related uncertainties, Hain Celestial witnessed a solid start to fiscal 2021. Its top and the bottom line outshone the Zacks Consensus Estimate and improved year over year during first-quarter fiscal 2021. In fact, earnings surpassed the Zacks Consensus Estimate for the fifth straight quarter. While higher sales and margins fueled the bottom line, increased sales in North America and International segments aided the top line. Margins were also impressive. During the first-quarter conference call, management projected gross margin growth in fiscal 2021. The company also anticipated strong double-digit increase in adjusted EBITDA along with expansion in adjusted EBITDA margins for fiscal 2021.
Analysts are also optimistic about this natural and organic foods company. The Zacks Consensus Estimate for its earnings currently stands at $1.27 for fiscal 2021 and $1.48 for the next fiscal. These indicate year-over-year growth of more than 51% and 16%, respectively. Also, for second-quarter fiscal 2021, earnings stood at 28 cents, up from 17 cents delivered in the year-earlier quarter. A VGM Score of B further speaks of the stock’s upbeat run on the bourses.
All in all, Hain Celestial looks well poised for growth given all the aforementioned factors, including solid transformation strategy and sound fundamentals.
Nomad Foods (NOMD - Free Report) has delivered an earnings surprise of 10.2% in the past four quarters, on average. It carries a Zacks Rank #2.
Darling Ingredients (DAR - Free Report) , also a Zacks Rank #2 stock, has an expected long-term earnings growth rate of 26.3%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Here's Why Hain Celestial (HAIN) is a Solid Investment Pick
Shares of The Hain Celestial Group, Inc. (HAIN - Free Report) have appreciated 62.1% over the course of a year, thanks to its robust strategic endeavors, including transformation strategy. The transformation plan is aimed at simplifying portfolio, identifying additional areas of productivity, driving top-line growth and improving cash flow. Moreover, the company is focused on its global strategic goals and continues to make marketing investments in key brands. These endeavors have aided the Zacks Rank #2 (Buy) stock outperform the industry’s rise of 2.3% in a year’s span.
Let’s Analyze Closely
Apart from making investment in core brands, Hain Celestial is on track to simplify business to focus on areas with high-growth potential by exiting non-core assets. Progressing along such lines, management recently divested the company’s U.K. fruit business, including the Orchard House Foods Limited operations and associated brands, to a U.K.-based private equity firm Elaghmore. We note that the company’s fruit business was affected by the coronavirus pandemic. During first-quarter fiscal 2021, the foodservice-oriented fruit business continued to be weak as several offices and restaurants were shut or had limited service. Also, the fruit business caused a 270-basis points drag on overall international adjusted EBITDA margins during the first quarter of fiscal 2021.
Notably, the latest divestiture resonates well with the company’s strategic transformation efforts, further simplifying its brand portfolio. This divestiture will also boost the company’s international growth profile. In addition, this will drive the company’s overall adjusted EBITDA margins.
Other divestitures include sale of its Danival business in Europe, the Rudi's Gluten Free Bakery TM and Rudi's Organic Bakery brands. Earlier, management sold two loss-making brands, SunSpire and Arrowhead Mills. Moreover, the company concluded the sale of its entire equity stake in Hain Pure Protein Corporation, which incorporates the FreeBird and Empire Kosher businesses. All these divestitures have been simplifying the company’s portfolio and driving overall growth. In fact, by exiting smaller and non-strategic brands, Hain Celestial is able to reduce supply-chain complexity and redeploy resources toward bigger growth opportunities.
Furthermore, Hain Celestial’s robust initiatives include product innovation, marketing and optimization efforts to fuel top-line growth. Management is also on track with boosting automation capabilities in plants, rightsizing infrastructure, redesigning engineered products, and optimizing pricing. In addition, it targets strategic acquisition opportunities, which is likely to result in incremental sales along with providing the company a strong foothold in the packaged food and grocery market.
More Facts Highlighting Strength
Despite pandemic related uncertainties, Hain Celestial witnessed a solid start to fiscal 2021. Its top and the bottom line outshone the Zacks Consensus Estimate and improved year over year during first-quarter fiscal 2021. In fact, earnings surpassed the Zacks Consensus Estimate for the fifth straight quarter. While higher sales and margins fueled the bottom line, increased sales in North America and International segments aided the top line. Margins were also impressive. During the first-quarter conference call, management projected gross margin growth in fiscal 2021. The company also anticipated strong double-digit increase in adjusted EBITDA along with expansion in adjusted EBITDA margins for fiscal 2021.
Analysts are also optimistic about this natural and organic foods company. The Zacks Consensus Estimate for its earnings currently stands at $1.27 for fiscal 2021 and $1.48 for the next fiscal. These indicate year-over-year growth of more than 51% and 16%, respectively. Also, for second-quarter fiscal 2021, earnings stood at 28 cents, up from 17 cents delivered in the year-earlier quarter. A VGM Score of B further speaks of the stock’s upbeat run on the bourses.
All in all, Hain Celestial looks well poised for growth given all the aforementioned factors, including solid transformation strategy and sound fundamentals.
More Solid Food Stocks
B&G Foods (BGS - Free Report) has a trailing four-quarter average earnings surprise of 9.3% and presently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nomad Foods (NOMD - Free Report) has delivered an earnings surprise of 10.2% in the past four quarters, on average. It carries a Zacks Rank #2.
Darling Ingredients (DAR - Free Report) , also a Zacks Rank #2 stock, has an expected long-term earnings growth rate of 26.3%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>