CLearline Capital’s 5 Best Catalyst-Driven Value Stocks to Buy Now

Page 1 of 5

Below we present the list of 5 Best Catalyst-Driven Value Stocks to Buy Now. For further background on this list and more of Clearline Capital’s top stock picks, please see 10 Best Catalyst-Driven Value Stocks to Buy Now.

5. Whole Earth Brands Inc. (NASDAQ:FREE)

Leading off the second half of our list of Mark Majzner’s top catalyst-driven value stock picks is Whole Earth Brands Inc. (NASDAQ:FREE), a packaged foods company that focuses on healthy foods and sugar-free sweeteners. Clearline Capital took a stake in FREE during Q2 and added another 618,514 shares to it in Q3.

Whole Earth, which announced the acquisition of health food brand Swerve for $80 million earlier this month, is chaired by former longtime The Hain Celestial Group, Inc. (NASDAQ:HAIN) CEO Irwin Simon, who took that company from less than $20 million in sales in 1994 to more than $2 billion today.

The company’s valuation looks dirt cheap according to Maran Capital, which discussed Whole Earth Brands in its Q3 investor letter:

“It has dominant market share in France and parts of Europe with its Canderel brand, leading market share in its licorice-based flavorings business, and strong growth brands in its Whole Earth and Pure Via natural non-sugar sweeteners (the former grew 70% y/y in 1H 2020).

These leading brands should generate just under $300mm of revenue, ~$65mm of EBITDA, and over $1/sh of cash earnings next year. Yet, at a market cap of $300mm and an enterprise value of $385mm, FREE is trading at 1.3x sales, 6x EBITDA, and 8x cash earnings. An undemanding set of expectations is embedded in this valuation.”

Page 1 of 5