Investopedia: Hain Celestial's Valuation Already Incorporates Strong Expectations

Even as someone who isn't all that interested in the “healthy lifestyle” trends of today, I find it interesting to see the sort of visceral reactions that stocks like Hain Celestial (Nasdaq:HAIN), White Wave (Nasdaq:WWAV), and Annie's (Nasdaq:BNNY) provoke in investors/readers. In particular, there appears to be a very vocal percentage out there that are just incensed over the valuation and attention these stocks get and absolutely insistent that healthy/organic eating is just a fad.

Whether it's a fad or not (I happen to lean toward “not”, even though I don't participate), there's no question that these stocks have generated some sizable expectations on the Street. As one of the veterans of the sector, Hain Celestial is a good case in point – today's valuation already more than incorporates assumptions that Hain will significantly outgrow the packaged food sector and generate above-average long-term profits. So much so, in fact, that I find it hard to see how the company can live up to (or grow into) these expectations.

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Investopedia: Annie's Still A High Growth-High Multiple Proposition

The hot packaged food market has cooled a bit recently, but Annie's (NYSE:BNNY) continues to sport a rich multiple as a relatively rare high-quality play on consumer demand for natural and organic food. Annie's isn't just a healthy living play, though, as the company is still relatively young and can look forward to years of product introductions and further distribution leverage. I recognize that growth investors tend to emphasize opportunities more than multiples, but more value-conscious investors may not find Annie's so appealing today.

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Investopedia: Whole Foods Disappoints, Comes A Little Closer To Value

Whole Foods Market (Nasdaq:WFM) doesn't really run sales, but another quarterly disappointment has put the shares that much closer to a potential value. Whole Foods continues to enjoy good loyalty and a customer base of above-average affluence, and that should pay off down the road. That said, it's clear that these shares aren't exactly cheap by conventional standards and still very sensitive to relative modest shortfalls in reported results.

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Investopedia: Annie's Surfing A Rising Tide In Food

Annie's (NYSE:BNNY) looks like one of those companies that is destined to be controversial and frustrating for the skeptics. The company's business model is predicated on selling premium-priced packaged foods to customers who believe it's somehow better for them, and while skeptics will almost certainly question how sustainable that model is, plenty of companies have prospered for years by selling people on the notion that there is value in paying up for their particular products.

In the meantime, the more pressing financial questions revolve around the company's ability to successfully introduce new products and drive better margins while they do. Not surprisingly, the stock is no particular bargain today, but growth investors are not likely to abandon it for that particular reason.

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