10 Cheap Penny Stocks to Buy According to Hedge Funds

6. Hain Celestial Group Inc. (NASDAQ:HAIN)

Forward P/E Ratio as of March 11: 7.74

Share Price as of March 11: $4.48

Number of Hedge Fund Holders: 22

Hain Celestial Group Inc. (NASDAQ:HAIN) manufactures and markets organic and natural products. It offers a range of goods from infant formula and plant-based beverages to personal care items and teas. It caters to consumer needs through various distribution channels, which include supermarkets, e-commerce, and specialty stores, under well-known brands like Earth’s Best and Celestial Seasonings.

The company’s Baby and Kids segment is supported by its Earth’s Best brand and is experiencing a strong resurgence with a 29% year-over-year increase in formula consumption during the FQ2 2025. Earth’s Best snacks and cereals saw double-digit consumption growth. 83% of Earth’s Best dairy formula shoppers remain brand loyal and seek their preferred formula at other retailers if it’s unavailable at one. Ella’s Kitchen, which is the UK’s leading baby food brand, also contributed to this positive performance. Distribution grew by low single digits, while sales in partnered stores increased by high single digits.

The company anticipates continued growth in the Baby and Kids segment driven by additional distribution gains, increased e-commerce marketing, and innovative product launches, which include a self-feeding platform. Hain Celestial Group Inc. (NASDAQ:HAIN) is focused on regaining its leadership in the organic infant formula market, using Earth’s Best’s established brand recognition.

Choice Equities Capital Management has been optimistic about the company due to its improved financials and strong growth potential. It stated the following regarding Hain Celestial Group Inc. (NASDAQ:HAIN) in its Q3 2024 investor letter:

“The Hain Celestial Group, Inc. (NASDAQ:HAIN) – Hain Celestial Group is a recent addition to the portfolio. Since taking the helm in January 2023, CEO Wendy Davidson has been instrumental in driving the company’s transformation. Davidson has simplified the business by divesting non-core brands, focusing on higher-margin, core products, and implementing effective cost-saving measures. These initiatives have already led to noticeable improvements in operational efficiency, lower working capital needs, margin expansion, and a more consistent and desirable brand portfolio, positioning the company for attractive sustainable growth. As a result of these efforts, which have positioned the company well for several dollars of free cash flow per share in coming years, Hain Celestial Group now has lower leverage than most of its peers and stronger top and bottom-line growth prospects, yet the company trades at a highly discounted multiple on a forward-looking view. A more detailed internal memo has been attached for existing investors.”