Increasing appetite for organic products is bringing natural and organic food companies in the limelight, and The Hain Celestial Group, Inc. ( HAIN ) is not any exception. The stock, on Oct 4, attained Zacks Rank #1 (Strong Buy).

Why the Upgrade?

A leader in natural food and personal care product categories with an extensive portfolio of well-known brands and strong fundamentals, Hain Celestial is poised to surge as the economy gradually revives and demand for organic food increases.

Hain Celestial constantly endeavors to expand its footprint in organic and natural products and in turn, "Change the Way the World Eats." The company's latest attempt is the acquisition of Tilda Limited, a renowned name in Basmati rice and Rudi's Organic Bakery, one of the leading organic and gluten-free companies. Recently, it fully acquired Hain Pure Protein Corporation.

Hain Celestial's strategic investments coupled with continued efforts to contain costs, increase productivity, and enhance cash flows and margins enabled it to deliver healthy results. The company, which competes with General Mills Inc. ( GIS ), expects to sustain strong momentum through acquisitions, which have helped it in building market share.

If we look at the company's earnings surprise history over the last 12 quarters, Hain Celestial has topped the Zacks Consensus Estimate by an average of 3.2%, including an earnings surprise of 1.1% in fourth-quarter fiscal 2014. In the last concluded quarter, the company posted earnings of 90 cents a share that came a penny ahead of the Zacks Consensus Estimate and surged 39% year over year. Management cited that strong top-line growth (up 26%), integration of acquired businesses and focus on high margin carrying brands led to bottom-line growth.

For fiscal 2015, management now anticipates sales of $2,725 million to $2,800 million, up 27% to 30% from fiscal 2014. Earnings per share are expected between $3.72 and $3.90, representing a year-over-year increase of 17% to 23%.

Strong results and the upbeat guidance led to a rise in the Zacks Consensus Estimate, which increased 3% to $3.83 for fiscal 2015 and 4.8% to $4.37 for fiscal 2016 in the past 60 days.

Other Favorably Ranked Stocks

Other stocks that look promising include ConAgra Foods, Inc. ( CAG ) and Kraft Foods Group, Inc. ( KRFT ) holding a Zacks Rank #2 (Buy).

Visit link:
Hain Celestial Riding on Organic Wave: Add HAIN to Portfolio - Analyst Blog