Buy Planet Organic (POH) at current levels

Written by Brian Hicks
Posted December 13, 2005

Price target $16.75

When I first started recommending Planet Organic I was met with an anticipated, but completely illogical resistance.

Traditional investors were quick to mock the idea of investing in an organic and natural food retail chain - calling it a joke…and my recommendation naïve and reckless.

But there's nothing naïve and reckless about a company that's finished every year since its IPO with a gain - in one of the fastest growing and most profitable markets in the world today.

In fact, by 2007, the organic market is projected to reach a value of $30.7 billion.

In the U.S. alone, organic product sales have grown by 20% or more each year since 1990. Compare that with the total U.S. food sales which grow at an average rate of only 2% to 4% a year!

And Canada's organic growth rates are paralleling those of the U.S.

But even now - no one is paying attention to the Canadian market!

While investors have been falling over themselves, trying to get a piece of Whole Foods Markets (WFMI:Nasdaq) - the most profitable organic retailer in the U.S. and the most profitable supermarket chain in the U.S. (even up against the likes of Safeway and Kroger) - they're missing the boat in the Canadian market.

In September 2004, Business Edge Magazine said that Planet Organic was "well on its way to major-league status."

Sine then, the company has acquired 14 more organic and health food stores, and its stock has risen 180% - making it one of the top investments in the market today.

My readers have already doubled their investment in this stock - and we're looking for a lot more.

In the past four years, Planet Organic has come out ahead - every year.

Take a look:

4 Straight Years of Gains

Planet Organic Gain
2001 +55%
2002 +76%
2003 +8%
2004 +48%
2005 +177% (YTD)

Now last month, Planet Organic released its annual numbers. And like clockwork, the company once again broke records, announcing a 125% increase in sales.

And just last week, the company released its first quarter figures which showed an 81.1% increase in sales and a 43.9% increase in revenues.

The company has never been stronger.

And trading around $3.00 per share, Planet Organic continues to be a steal.

As we head into 2006, more and more investors are going to realize that despite their illogical 'gut feelings' about organic markets - the numbers are just too mouth watering to ignore.

And based on Planet Organic's incredible…and profitable growth, coupled with the continual growth rates of the organic and natural food market in Canada, I'm predicting that this stock will be trading around $6.90 to $7.10 per share by summer.


Jeff Siegel