On Jan 22, 2013, Zacks Investment Research upgraded The Hain Celestial Group Inc. (HAIN), a leader in natural food and personal care products categories, to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
A solid return of roughly 71% in the past one year, strong operating performance and rising Zacks Consensus Estimates facilitated Hain Celestial to attain a Zacks Rank #1 status, thereby offering a healthy investment opportunity for investors.
Hain Celestial’s strategic investments plus continued efforts to contain costs, increase productivity, and enhance cash flows and margins, have enabled it to deliver healthy results. The company, which competes with General Mills Inc. (GIS), expects to sustain strong momentum as it remains well positioned to capitalize on the growing global demand for organic products through acquisitions, which has been a key strategy in building market share.
Hain Celestial constantly endeavors strategic opportunities to expand its footprint in organic and natural products and in turn, "Change the Way the World Eats". Its latest attempt is the acquisition of Tilda Limited, a renowned name in Basmati rice. Management believes that the buyout of Tilda will augment the company's adjusted earnings by 6 cents to 10 cents a share during the second half of fiscal-year 2014.
Earlier, the company had acquired leading packaged grocery brands Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat from Premier Foods plc. The company also acquired Ella's Kitchen Group Limited that offers organic baby food products under approximately 80 brands and provides them in easy to carry pouches.
If we look at the company’s earnings surprise history over the last 13 quarters, Hain Celestial has topped estimates by an average of 4.1%. In the last concluded quarter, the company posted earnings of 52 cents a share that came a penny ahead of the Zacks Consensus Estimate and surged 26.8% year over year. Management cited that strong top-line growth of 32.7%, integration of acquired businesses and focus on high margin carrying brands facilitated bottom-line growth.
Management anticipates sales in the range of $2,025 million to $2,050 million in fiscal 2014, reflecting a year-over-year increase of 17%. Earnings are projected in the range of $2.95 to $3.05 per share, up 16% to 20% year over year.
The Zacks Consensus for fiscal 2014 increased 2.3% to $3.09, while for fiscal 2015 it rose 4.6% to $3.61 per share in the last 90 days.
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