The WhiteWave Foods Co (WWAV) Is a Great Company at Too High a Price

WhiteWave’s premium dairy business is projected to grow in the mid-single digits in 2013. Household penetration of premium dairy remains low at just 10%, and I believe that, as that number grows, more and more people will recognize and patronize the Horizon brand.

The company has a great stable of names to drive growth going forward and possibly justify the price premium in its stock.

Looking forward
WhiteWave net sales are projected to grow in the high- single digits in 2013, driven by volume increases. In the latter half of the year, management expects to increase capacity that is currently a restraint on the company’s output and its operating costs. If the process stays on schedule, we should see the back half of the year yielding fatter margins and even bigger sales figures.

I imagine the second quarter won’t be a great one as the company expects larger operating costs in the first quarter, which should hold down the bottom line. But once that event passes and Wall Street overreacts, WhiteWave may enter a reasonable price territory and be ripe for the pickin’. As always, only invest in businesses in which you are knowledgeable and comfortable.

The article WhiteWave Foods Is a Great Company at Too High a Price originally appeared on Fool.com and is written by Michael B. Lewis.

Michael B. Lewis doesn’t own any shares of WhiteWave Foods and Dean Foods, but The Motley Fool does.

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