This Day On The Street
Continue to site
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

WhiteWave Proves Whole Foods' Results Dead Wrong

NEW YORK (TheStreet) -- With its first quarter results, WhiteWave Foods (WWAV - Get Report) showed Whole Foods Market (WFM - Get Report) investors that there is still money to be made in the organic beverage and food space.

Shares of Whole Foods are down close to 20% on the week, while WhiteWave's jumped 10% after releasing quarterly results. Shares of WhiteWave are back up near 52-week highs, at the same time that around a third of the population is lactose intolerant. There's another large part of the consumer market that has chosen to simply cut dairy out of their diets. Both are big positives for WhiteWave.

WhiteWave still has a large presence in both almond milk and soy milk. The company owns the soy and almond milk market, having over 25% of the market share for each. Now it's looking to capitalize on the increasing appetite for other natural and organic foods.

Eating healthy is proving to be a very powerful trend. WhiteWave Foods is proving to be the best pure play on this movement market.

There are some key growth areas for the company, the first being the expansion of its Horizon brand. It will soon launch Horizon brand kids' snacks. It has already launched Horizon macaroni and cheese.

Its $600 million acquisition of Earthbound earlier this year gave WhiteWave the brand presence and scale potential to take on the organic foods industry head on. Earthbound currently has a leading position in the organic packaged salad category, owning 45% of the market share. Earthbound plans to expand into the organic bowl salad kits, as well as single serve salad kits.

WhiteWave is also expanding into China. The world's largest country has a very large consumer base. WhiteWave recently inked a joint venture with China's dairy giant Mengniu Dairy. And as the level of income rises in the country, consumers will be able to trade up to organic foods and beverages.

WhiteWave will be making three warehouse expansions this year, along with a new manufacturing facility in North America. This should help lower costs by making the company's supply chain more efficient.

Innovation is still alive and well at WhiteWave. The company is rolling out rice-based creams, as well as new yogurt products. Its Silk brand is also getting a boost, which includes adding protein and fiber almond milk, and an almond-coconut blend. It's in the process of adding of Dunkin' Donuts (DNKN) brands to the coffee creamer category.

WhiteWave still appears to be very compelling from an investment perspective.

WhiteWave trades at 27.5 times next year's earnings estimates. That's still below other companies that in the food industry, including Annie's (BNNY), which trades at a forward P/E of 29.1, Lifeway Foods (LWAY) at 29.3 and Post Holdings (POST) at 30.8.

If you're a believer in the long-term viability of the organic food market, WhiteWave still a buy for long-term investors.

At the time of this article the author did not own shares of any company listed.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
WWAV $40.78 -0.27%
WFM $28.76 -0.98%
AAPL $95.18 1.64%
FB $117.44 -0.95%
GOOG $692.33 -0.84%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs