The natural-foods business is the flavor of the moment and expected to grow at an 8%-10% CAGR through 2020. In 2011 the US organic market pushed through the $30 billion sales barrier and has been growing faster than the non-organic segment.

Organic and natural foods stocks have an almost limitless addressable market as, excluding Whole Foods (WFM), organic and natural foods make up 5% or less at the average grocery. Yet, according to the Organic Trade Association, 81% of American families buy organic at least sometimes, making the addressable market even larger for a company such as Hain Celestial Group (HAIN), which offers over 50 organic brands and has grown tremendously through acquisitions.

Hain Celestial, has improved the health of its shareholders’ portfolio by 50% this year. Its growth rate has been fantastic despite some inconsistent performances over the past few quarters when Hain failed to satisfy consensus estimates.

But the company finally managed to top Street expectations in the fourth quarter. In addition, Hain’s outlook turned out to be better than expected, and this sent shares soaring.

Let’s check out the factors that make Hain Celestial a great call options trade today:

1. Technicals Look Good

Shares of Hain Celestial traded up 0.53% on Wednesday, to close at $79.42. HAIN has a 1-year low of $51.51 and a 1-year high of $85.48. The stock’s 50-day moving average is $75.35 and its 200-day moving average is $65.96. The company has a market cap of $3.872 billion and a price-to-earnings ratio of 33.91.

On a trailing P/E basis as well, Hain’s multiple of 33x is well below many other peers, such as Annie’s (NYSE: BNNY) 72x.

Hain also has a better risk-return profile since it is geographically diversified and has well-established brands.

2. Great Report Last Quarter – At Last!

Hain Celestial last released its earnings data on August 21 and investors witnessed terrific revenue growth, while net income and operating margin both improved.

The company reported $0.65 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.62 by $0.03. The company had revenue of $463.50 million for the quarter, compared to the consensus estimate of $454.82 million.

Hain Celestial Group’s revenue was up 32.1% compared to the same quarter last year. Analysts expect that Hain Celestial Group will post $3.00 EPS for the current fiscal year.

With the global organic food market expected to be worth around $105 billion by 2015, there is enough room for Hain to grow further.

3. Growth Through Acquisitions

Hain Celestial has grown on the back of acquisitions so far, but its own brands have also been doing well. HAIN expects many of its brands, which are currently worth $100 million and $50 million annually, to double in size going forward.

HAIN’s private label brands in the U.K., a market that accounts for a fourth of its revenue, are gaining traction and contributed 51% of overall food sales in the nation. The company is planning to introduce more private label products and kicked off the initiative by launching eight products in May.

HAIN is still integrating the three acquisitions it made last year. Management is optimistic about BluePrint and Ella’s Kitchen, two of these acquisitions. With BluePrint, Hain expanded its product portfolio to include the juice category, while with Ella’s Kitchen it formed a global infant, toddler and kids division.

4. New Products Help Growth

In the U.S., HAIN saw robust gains with revenue up almost 18% from the year-ago period. More importantly, product sales in the U.S. are up an impressive 36% this year, and HAIN credits its innovation for this terrific performance. The company has launched 150 new products this year, including the MaraNatha coconut almond butter, organic veggie and protein pouches, barbecued chicken nuggets, etc.

It expects these products to continue to gain traction and lead to better revenue in the future. Apart from new product launches, HAIN is also focused on trimming down costs and driving productivity savings.

5. Moving Forward with Productivity Savings

Looking ahead, the company aims to record $40 million to $50 million in productivity savings in the current fiscal year. HAIN was able to record an improvement of 40 basis points in gross margin in the previous quarter. With higher productivity savings expected in the future, margins might expand further.

6. Expanding Distribution

Another advantage for Hain Celestial is the ever expanding network of its distributors such as United Natural Foods (UNFI) and grocers such as Whole Foods Market (WFM).

Whole Foods recently expanded into three markets and sees demand for 1,000 stores in the U.S., up from 355 stores at present.

Such expansions on the part of carriers of HAIN’s products should undoubtedly help the company grow.

7. Plenty of Analyst Support

HAIN has been the subject of a number of recent research reports – the most recent was Janney Montgomery Scott restating a “BUY” rating.

Analysts at Argus raised their price target on shares of Hain Celestial from $72.00 to $93.00 and now have a “buy” rating on the stock.

JPMorgan Chase & Co. and Canaccord Genuity analysts have also raised their price targets and ratings.

Recommendation

Organic food and beverages have gained so much popularity across the globe over the past few years that they can now be considered mainstream. Supermarkets such as Wal-Mart (WMT) carry an ever-increasing range of organic food product lines. In this way, HAIN also stands to benefit from the rapid expansion of Whole Foods.

Hain Celestial’s performance has been outstanding this year and looking at the company’s initiatives and expected growth in the organic food market, it should continue to perform well.

HAIN has a lot of opportunity going forward as outlined above. The stock’s appreciation of almost 50% this year is a testament to its strong performance. Considering the opportunities ahead, HAIN can go higher, which will also give us the opportunity to make this options trade very profitable.

OPTIONS TRADE: Buy the HAIN Feb 2014 90.000 call (HAIN140222C00090000) at or under $2.85, good for the day. Place a protective stop limit at $1.15 and a pre-determined sell at $4.55.

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