HAIN No Sunshine For So Long

HAIN no sunshine for so long

It’s not warm, but won’t go away

HAIN no sunshine for so long

It may look like a goner, but this pig won’t go away

With Goldman Sachs is it gone?

Is the company in play?

HAIN no sunshine for so long

It’s products need a new home

Then the stock will go away

And I know, I know, I know, I know, I know, I know, I know, I know,
I know, I know, I know, I know, I know, I know, I know, I know, I know, I
know, I know, I know, I know, I know, I know, I know, I know, I know

Hey leave this equity alone

But, HAIN no sunshine for so long

Hain no sunshine for so long

Only darkness every day

HAIN no sunshine for so long

Turn around, or a new home?

Then new shareholders can play

Then new shareholders can play

Then new shareholders can play

Then new shareholders can play

The Hain Celestial Group’s stock chart is quite ugly. In July of 2015, the price peaked at around $68 per share. This was followed by a bumpy fall to roughly $16 per share in the December 2018 time frame. However, there must have been a ray of light and hope because the stock rallied to $45 per share during in October of 2021. Then came the beginning of the end to today’s price of $1.59 per share. Is there any cure for the HAIN pain? Perhaps a new CEO and a realistic set of targets. Your pawnshop team is keeping a close eye on this natural food company. Why? Because nobody cares since the market capitalization has drifted down to roughly 150 million and the stock trades for under $2 per share. One can say it has officially entered “the pawnshop zone”. Also, we listened to last quarter’s earnings replay three times. The amount of disdain was so powerful, we could feel it. In our experience, that type of emotion leads to a pretty good trade. But, in our opinion there could be a bigger bounce for three reasons: the interim CEO and Board Chairman, Goldman Sachs investment banking’s acts of kindness, and the new head of the FDA’s mission to make America healthy again. Hain Celestial’s products are 95% natural and beet juice is used as a sweetener. Ok, who’s going to tell RFK Jr not to worry about the scarlet tracer in his excrement because that magical beet root can definitely leave a mark.

Dawn Zier is Chair of The Board of Directors of The Hain Celestial Group. She was recently named Directors To Watch: Small to Mid-Cap class of 2025. Ms. Zier may be best known for engineering a remarkable turnaround of the iconic brand, Nutrisystem (Nasdaq: NTRI). During her six years as CEO, she created a multi-brand strategy, focused on digital transformation and innovation, resulting in a doubling of revenues, a 7-fold surge in operating income, and a 6-times increase in stock price. This performance earned Nutrisystem recognition as a Fortune Top 100 Fastest Growing Company. In 2019, it was acquired by a public strategic, yielding strong shareholder returns. Hain Celestial Board Member Alison Lewis became the interim Chief Executive Officer. Her experience is also very impressive. She was in charge of marketing at Coca-Cola, and Johnson & Johnson’s Consumer Brand division. While at Coca-Cola Ms. Lewis also ran Odwalla, a $350 million fresh juice brand. More recently, she was Chief Growth Officer at Kimberly-Clark (extremely relevant given the crappy performance of Hain Celestial Group). We think this duo did a fantastic job of handling an unhappy group of sell-side analysts. Moreover, public filings after earnings showed quite a bit of insider buying. These transactions provides more comfort than Dawn Zier’s name rhyming with my hero and the master of the pan flute, Zamphyr.

Hiring Goldman Sachs as your helper in business simplification usually makes a stock price move higher. Goldman is great at maximizing value for both good and bad assets. It probably will help Hain Celestial by being ranked #1 in the better for you category. The consumer staples sector doesn’t grow much more than low single digits, and there are a multitude of potential buyers that would rather layer on more revenue and rely on “synergies” to make a deal accretive. The Make America Healthy Again is in its larva stage, thus it’s too early to tell if the nation’s eating habits will change much. Hain Celestial also has popular brands in Canada and Europe, but most of the revenue comes from the United States. Which takes us to the back of the envelope.

When we annualize the most recent quarter that yields $1.56 billion in revenue and .28 cents in earnings per share (so let’s call it .25 -.30 range for FY26). That’s less than 10x multiple on earnings (which are depressed). We definately know our downside. Unless there is foul play, we believe HAIN lives. And if HAIN lives, it goes higher.

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