Groupon, reportedly, has plans to undercut companies such as PayPal with its own mobile payments system. Don't hold your breath on a long play because of this rumor. Instead, consider Annie's ( BNNY). I realize Annie's and Groupon do not run in the same business, but they're both recent IPOs. And, more importantly, Annie's, while not competition-free, has itself well-positioned in its space. The company's ticker stands for "Bunny," the mascot the organic and natural food company uses to market itself. Annie's makes snacks, macaroni and cheese, salad dressing and a variety of other products. It places its products almost evenly across three key categories:
36% of net sales to "mainstream grocery" stores such as Safeway (SWY) and regional chains like Wegman's. 37% of sales to a variety of "mass merchandiser(s)/other channels" such as Target (TGT), Costco (COST) and Wal-Mart (WMT). 27% of net sales to national and regional "natural retailers" such as Whole Foods Market (GOOG), Trader Joe's and Sprouts Farmers Market. That's pretty impressive distribution for anybody, let alone one in a category traditionally thought of as somewhat of a niche -- natural and organic foods. But, as contributor Jon Markman shows in an excellent story for TheStreet's premium Real Money service, organic has gone somewhat mainstream. Markman nicely outlines Annie's rapid growth trajectory as well as the massive opportunity it has to capture a larger share of its target market. And, again, look at that diversification across the key retail segments. It's impressive. You will not find many organic food companies so well- and evenly-situated without an overreliance on Whole Foods or Trader Joe's. Bottom line -- like Google, Annie's has a pretty obvious and doable way forward; I cannot say the same for Yelp or Groupon. At least not with enough confidence to go anywhere near buying the stocks. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.