InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

This Two-Minute Market Move Could Make You Rich

This Two-Minute Market Move Could Make You Rich[Revealed] How to generate instant income from the stock market. Over and over again. At will. This technique is so powerful – and safe – we’re guaranteeing you can use it to generate $1 million (or more) in retirement cash. And we’ll even send you a $1,000 check to kickstart your journey. Go here for details.

 

SunOpta Takes it on the Chin

By Tim Begany on November 12, 2015

The once-unstoppable organic food sector is in a slump, and it’s showing up in stock prices. Whole Foods Market (Nasdaq: WFM), the largest natural and organic foods retailer, surrendered more than a third of its market value in the past few months. Two of the larger players in organic food production and distribution, United Natural Foods (Nasdaq: UNFI) and Hain Celestial Group (Nasdaq: HAIN), have also taken some lumps this year.

But none have been pummeled lately quite like SunOpta (Nasdaq: STKL), one of the organic food industry’s most established small caps. Shares of the Canadian firm dropped by nearly half in the past three months, carving a massive chunk out of their more than 12-fold rise from Great Recession depths.

Plain and simple, shareholders are losing faith in SunOpta because it hasn’t been able to turn impressive top-line gains into consistent profit growth. For example, the company posted back-to-back earnings declines in 2012 and 2013, followed by nearly a 13% increase in 2014. This year, analysts see profits plunging 26% to $0.28 a share. Net margins have become razor thin, averaging less than 1% over the past few years.

Investors may not want to bail on SunOpta just yet, though. Despite suspect profitability metrics, it’s an industry standout with leading organic consumer brands such as Nature’s Finest all-natural juices and Pure Nature frozen organic fruits and vegetables.

SunOpta also supplies raw organic ingredients to numerous retailers such as grocery stores, beverage producers and discount outlets. Starbucks (Nasdaq: SBUX), PepsiCo (NYSE: PEP) and Costco Wholesale (Nasdaq: COST) are among its major customers.

Plus, decisive plans to jumpstart expansion are already underway.

The biggest change: SunOpta has a new CEO, former COO Hendrik Jacobs, who succeeded the prior chief Steven Bromley last month. Yet well before stepping in as top dog, Jacobs was already a strong force in efforts to take SunOpta to the next level, including the recently completed $444-million buyout of frozen organic fruit supplier Sunrise Growers.

Jacobs stressed the importance of the acquisition in a recent press release:

We believe the acquisition of Sunrise Growers is transformative for our company as it provides us with the leading market position in conventional non-GMO and organic IQF [individually quick frozen] fruit in the United States, and is expected to enhance our product mix, increase our revenue growth and margin profile, provide multiple synergy opportunities and leverage our strategic focus on integrated consumer products.

SunOpta shareholders will need to muster up a bit more patience, though, as growth initiatives won’t have an immediate effect. But the company should begin to show dramatic improvement next year, when analysts predict revenue and earnings will jump 26% and 50%, respectively.


You might also enjoy…

 

Boost Your Annual Income By As Much As $12,036

We’ve uncovered a unique income-boosting opportunity that allows you to collect up to $1,003 a month in extra government cash. 

This plan is available to everyone over the age of 18.

The amount you make isn’t dependent upon your marital status…

How much money you currently make…

Or even how much money you made in the past.

Best of all, because of the way Uncle Sam views the money that comes from this plan, your current—or future—Social Security benefits won’t be affected, either. 

There’s still time to get your name on the list for the next check run. 

I’ll show you how here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.