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Four Health-Conscious Food Stocks to Watch (SMFL, LWAY, STKL, SMPL)

The health and wellness and nutritional food industries are rapidly growing sectors that comprise companies that produce and sell a wide range of food products with the health-conscious consumer in mind. These companies are involved in a wide range of food production, from fresh fruits and vegetables to packaged ready-to-eat meals, manufactured nutritional foods, and health supplements. This sector has been gaining significant momentum in recent years as consumers become increasingly health-conscious.

As companies in the health and wellness food products space continue to expand their product portfolios and market reach through strategic partnerships, acquisitions, and store expansions, the potential for growth in this sector is enormous.

For investors, the health and wellness and nutritional food products industries present an attractive opportunity to invest in a rapidly growing sector that is likely to continue to experience strong demand and growth in the coming years. 

Here are four companies with big upside potential in the health-conscious food sector:

Smart for Life, Inc. (NASDAQ: SMFL) 

Smart for Life, Inc. specializes in developing, marketing, manufacturing, acquiring, operating, and selling a wide range of nutritional and health-related products. Their goal is to create a vertically integrated company through a buy-and-build strategy with serial accretive acquisitions. This strategy aims to aggregate companies generating a minimum of $300 million in revenues by the fourth quarter of 2026.

On April 25, SMFL announced the launch of their new line of proprietary protein ice cream health-food products. This new product category is the result of R&D initiatives spearheaded by Smart for Life's Chief Medical Officer, Dr. Sasson E. Moulavi (Dr. Sass). 

The protein ice cream bars are formulated to be high in protein and fiber, providing sustained energy while maintaining a delicious taste in a unique form factor. This groundbreaking concept of combining protein, fiber, and other nutrients in an ice cream bar format is unprecedented and represents a pioneering innovation in the frozen foods industry.

Dr. Sass commented, “This proprietary line of innovative protein-based ice cream bars has been a labor of love and represents a significant amount of research and development over the years. Our ice cream bars are packed with high-quality protein, fiber, and essential nutrients that support muscle recovery, health management, and healthy digestion that can help regulate blood sugar levels, reducing the risk of insulin resistance and type 2 diabetes.”

According to SMFL, launch flavors include vanilla, chocolate, cookies & cream, and strawberry, with additional flavors expected to join the line-up after feedback from the initial launch testing in select markets. 

According to Fortune Business Insights, the global ice cream market is expected to grow from $73.61 billion in 2022 to $104.96 billion by 2029, at a compound annual growth rate (CAGR) of 5.20%. This growth can be attributed to the increasing consciousness of health among consumers, which is expected to boost the demand for premium ice creams in the upcoming years.

Smart for Life has launched their innovative line of protein ice cream bars at a prime time for the segment. Consumers are becoming increasingly health conscious, and SMFL has the answer. These bars are rich in protein, fiber, and other nutrients, providing sustained energy with a novel taste in a unique form factor. 

Smart for Life expects the demand for these exceptional products to be substantial and is planning to release a variety of flavors in local markets and online. 

Lifeway Foods, Inc. (NASDAQ: LWAY) 

Lifeway Foods Inc. is a company that manufactures and sells probiotic-based products in the United States and around the world. Their main product is drinkable kefir, which is a cultured dairy product available in a variety of organic and non-organic sizes, flavors, and types. In addition, the company provides a range of European-style soft cheeses, cream, and other related products. 

Last month, LWAY announced their Q4 earnings results. Lifeway Foods earned a net income of $716,000, resulting in a profit of 5 cents per share in the fourth quarter. The company's revenue for the period was $35.8 million. For the year, Lifeway Foods reported a profit of $924,000, or 6 cents per share, with revenue totaling $141.6 million.

Since Lifeway Foods has not paid any dividends to its shareholders, it can be assumed that the company has been using all of its profits to expand and improve its business. Overall, despite having a low rate of return, Lifeway Foods appears to have some positive features in its operations. The high earnings growth of the company is likely due to the fact that it reinvests a significant portion of its profits back into its business.

SunOpta Inc. (NASDAQ: STKL) 

SunOpta is a United States-based company that is a pioneer in the production of sustainable, plant-based, and fruit-based food and beverages. SunOpta manufactures a range of natural, organic, and specialty products that are sold through various retail and foodservice channels. 

The company serves as a manufacturer for top natural and private label brands while also producing its own brands such as SOWN, Dream, West LifeTM, and Sunrise Growers.

According to a recent disclosure with the SEC, DekaBank Deutsche Girozentrale made a move of confidence by purchasing a new stake in SunOpta Inc.'s shares during the fourth quarter. The recent SEC disclosure reveals that the bank acquired 35,000 shares of SunOpta's stock, which were valued at $287,000. This investment decision could inspire confidence in other investors who are considering investing in SunOpta.

This move follows the earnings release from STKL last month. SunOpta released its quarterly earnings data on March 1st, which demonstrated strong performance and potential for profit. The company's EPS rose significantly to $0.02 per share, compared to the negative figure in the same quarter of the previous year. In the time frame, SunOpta generated revenue of $221.29 million, exceeding analysts' lower expectations of $220.60 million. Furthermore, the company achieved impressive returns on equity of 2.61%, which indicates growth and stability in its business operations. 

The Simply Good Foods Company (NASDAQ: SMPL)

The Simply Good Foods Company is a consumer-packaged health food and beverage company with a global presence. The company specializes in healthy snacks and meal replacements, including protein bars, ready-to-drink shakes, sweet and salty snacks, cookies, pizzas, protein chips, and recipes. 

Under the Atkins, Atkins Endulge, and Quest brand names, Simply Good Foods offers licensed frozen meals that cater to a wide range of dietary preferences and lifestyles.

In addition, Simply Good Foods also provides confectionery items like full-size and mini peanut butter cups, fudgy brownies, and gooey caramel candy bites. 

The company distributes its products through various retail channels, such as mass merchandise, grocery and drug channels, club stores, convenience stores, gas stations, and other channels.

In the beginning of April, Simply Good Foods reported strong quarterly earnings of $0.32 per share, surpassing the Zacks Consensus Estimate of $0.30 per share. This marks an earnings surprise of 6.67% and represents the fourth time in the last four quarters that the company has surpassed consensus EPS estimates. T

The company's revenues for the quarter ended February 20, 2023, were $296.58 million, which exceeded the analysis from the Zacks Consensus Estimate by 2.03%, indicating a strong performance. 

Simply Good Foods has also beaten consensus revenue estimates three times in the last four quarters. This positive financial data underscores the company's potential for growth and profitability, making it an attractive investment opportunity.



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