1-Star Small-Caps Set to Slide: Annie's?

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 (NYSE: BNNY  ) has received the dreaded one-star ranking.

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

Annie's facts

   

Headquarters (founded)

Berkeley, Calif. (1989)

Market Cap

$627.5 million

Industry

Packaged foods and meats

Trailing-12-Month Revenue

$154.8 million

Management

Co-Founder/CEO John Foraker

CFO Kelly Kennedy

Trailing-12-Month Return on Equity

15.6%

Cash/Debt

$14.6 million / $0

Competitors

General Mills (NYSE: GIS  )

Kellogg (NYSE: K  )

Mondelez International (Nasdaq: MDLZ  )

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

On CAPS, 47% of the 88 members who have rated Annie's believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, adamlevy, succinctly summed up the Annie's bear case for our community:

Insider sales continue to pile up. The company appears way overvalued compared to its closest comparables. Profit margins are going down as sales go up. The company can't compete with competition in cereals or dressings and condiments. Sales are likely only going up because of new products and new natural and organic stores opening. ... Overall, I don't like the balance sheet, the income statement, or the product. The last one is a bit more subjective than the first two, but I fear I'm not alone in that opinion.

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