This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Sowing More Growth

Editor's Note: This column was originally published as an alert to subscribers to Stocks Under $10 on Dec. 28.

As Americans take more notice of their diets, corporate marketing departments are trying to meet their needs. In the past 18 to 24 months, fast-food restaurants like McDonald's (MCD - Get Report) have jump-started sales growth by introducing gourmet salads to their otherwise high-calorie menus. Privately held sandwich shop Subway has also seen its popularity boom, with ads proclaiming dramatic weight loss achieved by customers eating its low-fat hoagies.

After some research, we believe the healthy-foods name to own in the Under $10 space is Wild Oats (OATS), and we added 400 shares at around $8.50.

The natural foods retailer is third only to Whole Foods Market (WFMI) and privately owned Trader Joe's in domestic sales. Even though these stores account for less than 10% of all U.S. grocery sales, Katherine DiMatteo, executive director of the Organic Trade Association, said in a Dec. 3 MSNBC.com article that natural foods revenue can more than double from an expected $15 billion in 2005 to $32 billion by 2009.

Wild Oats is in the late stages of a turnaround that has seen the divestiture of some high-priced stores that management bought in the '90s, as well as increasing sales of the company's private-label products. Improvements should continue as the retailer targets square-footage growth and increased operating efficiency. We believe it will move into the double digits if management reports two consecutive quarters of solid results.

Wild Oats was not always a single-digit stock. In 1999 it was trading in the high $20s, and the retailer used the stock as currency to make a lot of acquisitions. In hindsight, the prior management team overpaid for these deals, and shares fell under $5 by the end of 2000. To get the company back on track in 2000, management began closing or selling underperforming stores, 38 in all according to the latest annual filing with the Securities and Exchange Commission.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
MCD $98.90 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs