Back to top

The Zacks Analyst Blog Highlights: Herbalife, United Natural, Natural Grocers and Boston Beer

Read MoreHide Full Article

For Immediate Release

Chicago, IL – May 24, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Herbalife Nutrition Ltd. (HLF - Free Report) , United Natural Foods, Inc. (UNFI - Free Report) , Natural Grocers by Vitamin Cottage, Inc. and Boston Beer Company, Inc. (SAM - Free Report) .

Here are highlights from Wednesday’s Analyst Blog:

Americans Fill Carts with More Organics: 4 Top Gainers

The Organic Trade Association’s annual survey of the U.S. organic sector showed that an increasing number Americans filled their carts with organic products last year. In fact, the organic food products market made a new record as Americans continue to buy everything from organic ice cream to organic dried beans to organic fresh juices.

Sales of organic non-food products also created a new benchmark. Thus, investing in stocks making the most of this bullishness seems judicious.

Maturing U.S. Organic Sector

The Organic Trade Association’s recent survey showed that organic sales in the United States came in at $49.4 billion in 2017, up 6.4% from the previous year. Sales of organic food products rose 6.4% to hit a record high of $45.2 billion. It’s well above the growth rate of the overall food market that nudged up 1.1%. Organic food products’ share rose in the total food market, and now accounts for 5.5% of the total food products sold in various retail chains in the United States. In fact, the organic market in the country has more than doubled in size in the last decade alone.

Laura Batcha, CEO and Executive Director of the Organic Trade Association said “demand for organic is flourishing as consumers seek out nutritious and clean food that is good for their health and for the environment.” Batcha expects the organic food market to grow at a steady pace in the near term and still be able to surpass the growth rate of the broader food market.

Fruits and vegetables topped the organic sales category. The segment recorded $16.5 billion in sales last year, up 5.3% from the previous year. The organic dried beans subsector stood out with sales up 9%, indicating an uptick in demand for plant-based and legumes products.

One of the key organic categories, dairy and eggs also saw its sales increase 0.9% to $6.5 billion, while the beverage category registered a 10.5% rise to $5.9 billion. Fresh juices was the primary growth driver in beverages, with sales climbing nearly 25% to $1.2 billion. Alteration of health trends and innovation helped the beverages segment notch double-digit growth.

Organic Non-Food Market Sees Steady Growth

The organic non-food market too posted a solid 7.4% jump in sales to $4.2 billion last year, outstripping the meager 1.9% growth in the broader non-food market. The size of the organic non-food market has doubled in the last 10 years. Organic fiber was the fastest growing sub sector, up 11% to $1.6 billion, with most of the sales coming from organic cotton. Organic dietary supplements surged 9% due to increased demand for plant-based or whole food supplements.

Batcha said that “consumers don’t want to eat just clean food, but they also are demanding transparency, clean ingredients and plant-based products in every aspect of their lives”. She added that “the non-food organic market has made great strides, but there is still a vast opportunity for more growth in this sector.”

Tasty Food Stocks That Are Profiting

With everyone paying attention to organic products, certain firms are well poised to play this broader shift in the organic market place. On the surface, Pinnacle Foods Inc. (PF - Free Report) seems to be a processed food company. But, it also makes products including organic and light whipped butter spread that should make the most of this new trend. Fresh-foods grocer, Sprouts Farmers Market, Inc. (SFM - Free Report) too stands to gain. Sprouts has already projected double-digit revenue growth for this year and the next. Both, Pinnacle Foods and Sprouts currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Herbalife Nutrition Ltd., in the meantime, has come up with weight-loss solutions, meal replacements and protein shakes that cater to consumers’ present taste. Herbalife has gained more than 50% so far this year and is one of the top performers on Wall Street. The expected growth rate for the stock, in fact, for the current year is 10.3% compared with the industry’s estimated rally of 3.7%.

In the last 60 days, one estimate moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings rose 1.1% in the same period. If this isn’t enough, then the stock also carries a Zacks Rank #2 (Buy).

United Natural Foods, Inc.is one of the biggest organic food distributors. After all, Amazon’s Whole Foods is its top client. At the same time, United Naturals serves a number of smaller organic retailers in the United States. The company’s projected growth rate for the current year is 20.6%, more than the industry’s estimated rally of 15.2%.

In the last 60 days, one estimate moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings increased 0.6% in the same period. United Natural also carries a Zacks Rank #2.

Natural Grocers by Vitamin Cottage, Inc.– a Zacks Rank #2 company – is another specialty retailer of natural and organic groceries and dietary supplements. In the last 60 days, two estimates moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings jumped 19% in the same period.

Beer is not a health food. But craft beer sounds a bit healthier. Its sales continue to move north, whereas the overall volume of U.S. beer sales declined last year as shown in the Brewer’s Association 2017 figures. The Boston Beer Company, Inc., in particular, helped create the craft beer. The company’s expected growth rate for the current year is 22.6% compared with the industry’s estimated rally of 14.5%.

In the last 60 days, three estimates moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings increased 9.7% in the same period. If this is not enough, the stock also flaunts a Zacks Rank #1 (Strong Buy).

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                      

http://www.zacks.com                                                   

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.



More from Zacks Press Releases

You May Like