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Natural Foods Taking Off

Wednesday, 8 Sep 2010 | 5:52 PM ET

It seems all natural stocks are a healthy choice these days.

Shares of organic food giant Hain Celestial , for example, has caught a 45 percent gain just this year. Its competitor, United Natural , is not far behind with a 30 percent increase.

Natural Foods Flying High
A look at the natural food stocks that are hitting new highs, with Greg Badishkanian, Citi analyst.

Even though its close to a 52-week high, sentiment on Hain is "still pretty low," noted Citigroup analyst Gregory Badishkanian. It trades at rougly 17 times 2011 earnings, where the natural food group trades at about 22 times. Badishkanian said he's seeing accelerating sales growth for the category, so he's recommend buying HAIN.

Cooperation from mass marketers, like Walmart , has helped Hain Celestial, he said. The core of their business, however, is with independent stores, like Whole Foods . It currently accounts for roughly two-thirds of their business and as it grows, it will drive Hain's sales growth.

Hain's success says a few things about the consumer, said Badishkanian. First, people are beginning to view natural and organic foods as staples instead of luxury products. Second, the incremental cost in eating organic food is not to deter organic conumers, who tend to be wealthier than the typical consumer.

Watch the video to see the full interview with Badishkanian.

What's the Trade?

Joe Terranova, chief market strategist of Virtus Investment Partners, likes this space. He said Hain and its competitors are experiencing double-digit revenue growth because "healthy eating is becoming an affordable necessity."

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Trader disclosure: On Sept. 8, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Long S&P Puts; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (BHP); Finerman Owns (GOOG); Finerman's Firm Owns (HPQ); Finerman's Firm Owns (JPM), (JPM) Leap; Finerman Owns (JPM); Finerman's Firm Owns (MCD); Finemrna's Firm Owns (ORCL); Finemran's Firm Owns (WMT; Najarian Owns (AKAM) Call Spread; Najarian Owns (BRCD) Calls; Najarian Owns (HPQ) Calls; Najarian Owns (POT) Call Spread; Najarian Owns (ICK); Najarian Owns (SCCO); Najarian Owns (DD); Najarian Owns (TEVA); Najarian Owns (PFE); Najarian Owns (NOVL); Najarian Owns (MMR); Terranova Owns (AXP), (APA), (AAPL), (ARUN), (BMO), (C), (FCX), (XBI), (GS), (IBM), (JOYG), (MRVL), (OXY), (ORCL), (POT), (QCOM), (GLD), (RSH), (SU), (UPL), (X)

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (BWA)

For Brian Kelly
Accounts Managed By Kanundrum Cpaital Own (GLD)
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For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DLUEY)
Virtus Investment Partners own more than 1% of (DRYS)

For Mark Mahaney
Citigroup Global Markets Owns 1% Or More Of (YHOO), (AKAM), (NFLX)
Citigroup Global Markets Or Affiliates Managed Or Co-Managed Public Offering Of (PCLN), ReachLocal
Citigroup Global Markets Or Affiliates Received Investment Banking Compensation From (PCLN), ReachLocal For Services Provided In Past 12 Months
Citigroup Global Markets Or Affiliate Recieved Non-Investment Banking Compensation From (GOOG), (YHOO), (AMZN),(EXPE) In Past 12 Months
(PCLN), ReachLocal Are Or In Past 12 Months Were Investment Banking Clients
Of Citigroup Global Markets
(GOOG), (YHOO), (AMZN), (EXPE) Are Or In Past 12 Months Were Clients Of
Citigroup Global Markets (Non-Investment-Banking, Securities-Related Services)
(GOOG), (YHOO), (AMZN), (EXPE) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities-Related Services)
Citigroup Global Markets Is A Market Maker In (GOOG), (YHOO), OpenTable, (AMZN), (AKAM), (NFLX), (EXPE), (PCLN), Vistaprint NV, (NILE), GSI Commerce, Reach Local
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (GOOG), (YHOO)
Citigroup Global Markets Or Affiliates Owns 5% Or More Of (YHOO)

For Greg Badishkanian
A Citi Analyst Owns (WFMI)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (DPZ), (CCL)
Citigroup Global Markets Or Affiliates Managed Or Co-Managed Offering Of (MCD), (HOG), (HAS) In Past 12 Months
Citigroup Global Markets Or Affiliates Has Recieved Investment Banking Compensation From (MCD), (RCL), (HOG), (HAS) For Services Provided In Past 12 Months
Citigroup Global Markets Or Affiliate Recieved Non-Investment Banking Compensation In Past 12 Months From (BKC), (MCD), (CCL), (RCL), (HOG), (HAS), (JAH), Weight Watchers International
(MCD), (RCL), (HOG), (HAS) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(BKC), (MCD), (CCL), (RCL), (HOG), (HAS), (JAH), (HAIN), Weight Watchers International Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(BKC), (MCD), (CCL), (RCL), (HOG), (PII), (HAS), (JAH), Weight Watchers International Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities-Related Services)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (CCL), (RCL), (HAS)
Citigroup Global Markets Owns 10% Or More Of (CCL)
Citigroup Global Markets Is A Market Maker In (UNFI), (WFMI), (HAIN), (HANS)

Other Relevant Disclosures:
Terranova Owned (BRCM) On 7/27/10

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CNBC.com with wires.

  Price   Change %Change
HAIN
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UNFI
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WMT
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