Dean Foods Co (DF): White Wave Sailing Strong Into Earnings. Should You Buy?

Rich present, rich future
White Wave is set for more growth going forward — that much is clear. But it’s the short-term elements that are a bit more interesting. The company is completing its equity-for-debt swap with Dean Foods Co (NYSE:DF), whereby the former parent will relinquish nearly 30 million more shares at a price of $17.75. Once this is out of the way, the market will more clearly evaluate the operating performance of White Wave.

The company is priced at 22.4 times forward earnings — a bit too rich for price-conscious investors. That is not, however, a reason not to buy. Growth investors who like the plant-based food story should take a close look at White Wave. It is a well-managed, well-branded company that will continue to thrive for the foreseeable future. For the Street and investors, the next few months should show more clarity and more growth.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Dean Foods Company and WhiteWave Foods (NYSE:WWAV).

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