Hain Celestial (HAIN - commentary - Cramer's Take), an organic/health foods and premium tea manufacturer, is expected to release its third-quarter results and conduct its quarterly conference call before the market opens Monday. Hain is expected to earn 36 cents a share on revenues of $272.3 million. In the year-ago quarter, the company earned 30 cents a share on sales of $237.9 million.
I sold my stake in HAIN several months ago at around $32.50. Since then, the stock has retreated dramatically; as of the close Friday, it was sitting just above its 52-week low, which it also touched that day. I jettisoned my HAIN after riding the stock to very healthy gains. I believed tea sales were on the decline, wheat and other raw commodity costs were rising, and a slowing economy was certain to move the consumer down to inferior products rather than up to premium organic foods.
All of this has not deterred Hain from continuing to make small acquisitions over time. These acquisitions have helped Hain maintain a 20% growth rate during somewhat uncertain and challenging times. One of its latest ventures into the skin and personal care products segment is close to annualizing its integration into Hain. But HAIN has clearly given away its premium multiple and the stock trades at a discount (17 P/E) to its growth rate (20%), although analysts are expecting a slowing of growth in fiscal 2009.
Over on TheStreet.com, James Altucher recently tapped HAIN as a top 10 Nasdaq short squeeze. Today, HAIN could be stretched to the downside, and any positive surprises could spark a short-covering rally.
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At the time of publication, Rothbort had no positions in the stocks mentioned, although positions can change at any time.
Scott Rothbort has over 20 years of experience in the financial services industry. In 2002, Rothbort founded LakeView Asset Management, LLC, a registered investment advisor based in Millburn, N.J., which offers customized individually managed separate accounts, including proprietary long/short strategies to its high net worth clientele. He also is the founder and manager of the social networking educational Web site TheFinanceProfessor.com.
Immediately prior to that, Rothbort worked at Merrill Lynch for 10 years, where he was instrumental in building the global equity derivative business and managed the global equity swap business from its inception. Rothbort previously held international assignments in Tokyo, Hong Kong and London while working for Morgan Stanley and County NatWest Securities.
Rothbort holds an MBA in finance and international business from the Stern School of Business of New York University and a BS in economics and accounting from the Wharton School of Business of the University of Pennsylvania. He is a Term Professor of Finance and the Chief Market Strategist for the Stillman School of Business of Seton Hall University.
For more information about Scott Rothbort and LakeView Asset Management, LLC, visit the company's Web site at www.lakeviewasset.com. Scott appreciates your feedback; click here to send him an email.
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