We recently compiled a list of the 10 Best Organic Food and Farming Stocks To Invest In. In this article, we are going to take a look at where The Hain Celestial Group, Inc. (NASDAQ:HAIN) stands against the other organic food and farming stocks.
The Rise of Organic Food and Farming
Organic farming practices focus on using natural methods to cultivate crops, avoiding synthetic fertilizers and pesticides. This approach not only enhances the quality of food but also contributes to preserving biodiversity and maintaining healthy ecosystems. The organic food and farming sector provides economic benefits as well, creating jobs and supporting rural communities.
The global organic food and farming industry has experienced significant growth in recent years, reflecting a shift in consumer preferences towards healthier and more sustainable food options. According to a report by The Business Research Company, the global organic food market was valued at $244.82 billion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 15.1% during 2024-2028 to reach a value of $489.75 billion by the end of the forecast period. This growth is largely driven by increasing awareness of health benefits associated with organic products and a growing concern for environmental sustainability.
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The 25th edition of the yearbook “The World of Organic Agriculture,” published by the Research Institute of Organic Agriculture (FiBL) and IFOAM – Organics International, highlights significant growth in the organic farming sector. Presented in February 2024 at the BIOFACH trade fair in Nuremberg, Germany, the report reveals that by the end of 2022, the area under organic management reached 96.4 million hectares. This marks an impressive increase of 26.6% or 20.3 million hectares compared to the previous year.
Australia continues to lead the world in organic farming area, boasting 53 million hectares, an increase of 17.3 million hectares. The report shows that organic farming area increased across all continents, reflecting a global trend towards more sustainable agricultural practices. In terms of producers, the number of organic farmers worldwide rose to 4.5 million in 2022, which is nearly a 26% increase from 2021.
Support for organic agriculture is gaining momentum globally, with many countries implementing action plans to promote organic farming practices. The number of fully implemented national regulations for organic agriculture rose to 75 in 2023, indicating a commitment to enhancing and regulating this sector.
According to the report, the global organic market reached nearly EUR 135 billion in 2022. The United States was the largest market, valued at approximately EUR 56.6 billion, followed by Germany at EUR 15.3 billion and China at EUR 12.4 billion. While some European countries saw a decline in organic sales, Canada and the US experienced growth in retail sales, with increases of 9.7% and 4.4%, respectively. These figures indicate that consumer interest in organic products is strong, particularly in North America, where health consciousness is driving demand.
Methodology
To compile our list of the 10 best organic food and farming stocks to invest in, we looked for the largest organic food and farming companies. We also reviewed our own rankings and consulted various online resources to compile a list of the best organic food and farming stocks. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best organic food and farming stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Two hands crunching into a bag of the company’s organic vegetable chips.
The Hain Celestial Group, Inc. (NASDAQ:HAIN)
Number of Hedge Fund Holders: 25
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is a prominent US-based company specializing in natural and organic foods, as well as personal-care products. It operates in over 75 countries, offering a wide range of items across snacks, baby products, beverages, meal components, and personal care. The Hain Celestial Group, Inc. (NASDAQ:HAIN) is one of the best organic food stocks to buy.
In its fiscal Q1 2024 earnings call, the company’s management highlighted the significant growth in the organic formula category. The company is focused on regaining its leadership position by promoting its USDA-certified organic infant formula, which is non-GMO and designed to support brain and eye health. The Hain Celestial Group, Inc. (NASDAQ:HAIN) offers a variety of organic options, including dairy and toddler formulations, catering to the needs of parents and babies. On December 23, 2024, Earth’s Best, the company’s organic baby brand in America, announced that its complete line of organic infant formula and toddler milk drinks is fully back in stock.
The company’s performance in the first quarter reflects a solid foundation for growth as The Hain Celestial Group, Inc. (NASDAQ:HAIN) continues to streamline its portfolio and improve its operational efficiency, leading to gross margin expansion. The management expects growth to accelerate in the latter half of FY25 due to several factors, including better timing for snack promotions, the recovery of infant formula supplies, and strategic brand building.
Choice Equities Capital Management stated the following regarding The Hain Celestial Group, Inc. (NASDAQ:HAIN) in its third-quarter 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.”
Overall, HAIN ranks 5th on our list of the best organic food and farming stocks to invest in. While we acknowledge the potential of HAIN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HAIN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
