1-Star Stocks Poised to Plunge: Annie's?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural and organic food producer Annie's (NYS: BNNY) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Annie's business and see what CAPS investors are saying about the stock right now.

Annie's facts

Headquarters (founded)Berkeley, Calif. (1989)
Market Cap$579.9 million
IndustryPackaged foods and meats
Trailing-12-Month Revenue$134.9 million
ManagementCo-Founder/CEO John Foraker
CFO Kelly Kennedy
Trailing-12-Month Operating Margin13.7%
Cash/Debt$2.4 million / $13.3 million
CompetitorsGeneral Mills
Kellogg
Kraft Foods

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 59% of the 44 members who have rated Annie's believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, kurtdabear, succinctly summed up the bear case for our community:

Decent products but probably not a good stock. ... Most shares are being sold to enable venture capital firms to get cash out of the company. ... Venture capitalists will still control about 2/3's of the stock and will no doubt be looking for a follow-on offering six months to a year down the road to unload more shares. The stock was marginally realistically valued at the IPO price, but is absurd at $35/sh.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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