Cramer noted that while the markets have soared, both Hain and Annie's have stumbled of late. Annie's was saddled with allegations of metal filings in their pizzas on Jan. 22, while Hain suffered from allegations of pesticides in its teas on Feb. 21. While both allegations were later found to be false, the damage done to both stocks still lingers.
While both are good companies, said Cramer, he's going with Hain as the way to play organic foods, as that stock is only up 5% for the year compared to 19% for Annie's.
He noted that Annie's trades at a full 39 times earnings with a 22% growth rate, not leaving much upside as his rule is to never pay a multiple that's more than twice the growth rate for a stock. Hain, however, trades at just under 20 times earnings and it has a growth rate of 17%, giving the stock much more room to run.
Cramer said there's also a lot to like about Hain other than its valuation. The company has aggressive expansion plans, both here and abroad, and is taking market share in just about every category in which it competes. Given that investors can pick up shares of Hain on the cheap, Cramer said he's a buyer.
No Huddle OffenseIn his "No Huddle Offense" segment, Cramer said it's time to part with Kimberly-Clark (KMB) on the heels of a recent downgrade. He said that while he still holds the makers of Kleenex and other iconic brands in high regard, he simply cannot recommend a stock trading at 17 times earning when it only has a 7% growth rate. Cramer said Kimberly-Clark remains incredibly pro-shareholder with a sizable dividend and meaningful stock buyback program. But with shares having risen so much, the company's yield has now fallen to just 3.5%. That's too much to pay, Cramer concluded, even for the venerable Kleenex. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV