There’s a new revolution in the markets and for once, it has nothing to do with crude oil! Sales of organic, health-centric food products have been making steady gains over the years, lifting not only the stock of companies that provide such goods, but also consumer expectations. According to industry surveys, more grocery shoppers are becoming discerning with their purchases: this is great for consumers because it further increases the competition among food products companies.
Because of this discernment, the organic food revolution has become widely popular, with studies showing that 81% of American households have purchased organic products at least some of the time. This statistics have encourage big-box retailers like Walmart Stores, Inc. (NYSE:WMT) to get in on the organic bandwagon — offering products typically not associated with the high-volume big-box sector.
While such organizations may be blamed by cynics for following a fad, the trend shows otherwise, with organic food industry sales totaling $39.1 billion in revenue in 2014, an 11.3% lift from the prior year. Figures like that would be criminal to ignore and will more than likely continue to attract a hoard of competitors.
However, they’ll find it difficult to top established names like Hain Celestial Group (NASDAQ:HAIN), which offers several popular brands, such as Health Valley, Walnut Acres, Celestial Seasonings, and Plainville Farms. Fundamentally, HAIN has pulled together an impressive portfolio, meeting or beating Wall Street’s earnings expectations since the first quarter of fiscal year 2012 or 15 consecutive earnings reports that were considered solid! In its most recent financial report, HAIN posted earnings per share of 45 cents, which was aligned with Wall Street expectations.
Year-to-date, HAIN stock is up slightly over 15%, or a 17-fold increase against the benchmark S&P 500, which is up an embarrassing 0.87% over the same time frame. While the equities sector has chopped up and down throughout 2015, unsure of which way the bulls or bears will ultimately take the markets, HAIN has steadily climbed upward. Yes, there has been occasional periods of volatility, but the fundamental performance of the stock continues to bolster the dominant trajectory.
In addition, the 50 day moving average — a popular gauge of a stock’s nearer-term momentum — hasn’t dipped below the 200 day moving average — longer-term gauge — since August of last year, and did so very briefly. This suggests that as long as dark-horse events do not injure the organic food industry, HAIN should likely offer consistent returns for investors.
Of course, nothing is guaranteed in the markets and HAIN stock is probably not going to make anyone rich off of a singular investment. Nevertheless, the strong momentum in food stocks will likely provide a respite from the general choppiness of American blue-chip stocks.