From the Seeing Green Blog at checkthemarkets.com
You know a movement is becoming a Megatrend when Jim Cramer and CNBC is promoting it. Yesterday Cramer and company were beating the drums about how many children in the US have become vegans or semi-vegans. According to the statistics he threw out, there are supposedly 3 million children in the US who don’t eat meat. He claimed there are over 1 million children who are strict vegans, and that number is growing every month.
“This is a growing trend, a serious, money-making trend” Cramer dramatically reminded his audience. Many parents, millions and millions of them, want to protect their children from pesticides, herbicides, injected hormones and meat riddled with anti-biotics.
These devoted parents are spending billions of dollars on organic and natural foods, including organic and/or free-range sources of meats. But the big story is how many parents want their families to be meat-less. That is fueling an enormous investment theme.
That is why Wall Street is loving publicly-traded companies like Hain Celestial Group (Nasdaq:HAIN) which Cramer indicated was the “King (or Queen) of Organic and Natural Foods”, or words to that effect. They seem a bit expensive to me right now, selling at 20 times next year’s earnings. They have an operating margin of around 10%, but their quarterly revenue growth is amazing! Year-over-year it’s up 69%, and what is also impressive is that the stock is selling for less than 2 times book value.
They do have a big wad of debt and I didn’t care for their balance sheet, but as Cramer pointed out, they have an impressive product line and seem to be ahead of the curve when it comes to their product offerings in the natural food realm.
Another stellar provider of natural foods is Hansen Natural Corp. (Nasdaq:HANS). They too seem expensive at at future P/E ratio of 29, and their stock is selling for an astronomical 19 times book value. Yet, their balance sheet and cash flow statement look quite a bit superior to HAIN.
The good news in all this is that Organic and “natural” food is here to stay, and the number of people who are leading a meat-free life is increasing in a big way. There is hope for planet earth and perhaps this is an important ecological trend as well as an economic one.
For more information about “truly organic food” check out the Organic Consumers Association at the following web address: http://www.organicconsumers.org/. Isn’t it encouraging to think of millions of children living a balanced and healthy life!!!
