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Meat. A simple staple has become a continuous source of scandal as horsemeat, or no meat, has been found in "beef" products in the EU. It highlights the complexities of the meat industry, and just how difficult it is for food giants to track their sources. Consumers (read: people that eat meat) aren't happy, trust in the food industry has dropped, and a shift in shopping habits is inevitable.

According to a consumer group survey, following the scandal 6 in 10 UK consumers have changed how they shop by buying less meat. The UK's biggest vegetarian ready meal brand has seen an its sales double, other vegetarian brands have reported spikes as well.

This rush for vegetarian food will likely not be sustainable, just as consumers continued to eat processed chicken following the "pink slime" scandal last year. But case after case it can't be denied that consumers are being deterred and increasingly leaning towards more "safe" alternatives advertised as organic, cage-free, grass-fed, local.

Quick Review of Negative Impacts:

Yum Brands (NYSE:YUM) took a hit when it was "forced to disclose to the Food Standards Agency in the U.K. that it found supplier samples for Taco Bell which tested positive for horsemeat."

Burger King (NYSE:BKW) "says it has already stopped buying meat from a supplier in Ireland linked to trace amounts of horsemeat in beef products."

The List:

With this in mind we created a list of food-focused US stocks that might receive some of benefits from the controversy. These benefits may be jumpstarted by the scandal, but they present a long-run play for investors looking to trade on the push towards healthy foods.

For the list below we focused on only the health-food names that have seen significant increases in hedge fund buying in the current quarter.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stock present strong long-run picks for your portfolio? Use this list as a starting point for your own analysis.

1. Dole Food Company Inc. (NYSE:DOLE): Engages in sourcing, growing, processing, marketing, and distributing fresh fruits and vegetables, and food products to wholesale, retail, and institutional customers worldwide.

  • Market cap at $947.71M, most recent closing price at $10.67.
  • Net institutional purchases in the current quarter at 12.1M shares, which represents about 23.53% of the company's float of 51.43M shares.
  • Top institutional owners: Dimensional Fund Advisors LP (5%), AllianceBernstein, L.P. (4.51%) and Bank of New York Mellon Corporation (4.25%)
  • Additional Factors: Shares shorted have increased from 6.75M to 8.36M over the last month, an increase which represents about 3.13% of the company's float of 51.43M shares. Days to cover ratio at 5.73 days. Despite bearishness from short sellers, over the last six months, insiders were net buyers of 4,228,484 shares, which represents about 8.22% of the company's share float.

2. The Fresh Market, Inc. (NASDAQ:TFM): Operates as a specialty grocery retailer.

  • Market cap at $1.93B, most recent closing price at $40.10.
  • Net institutional purchases in the current quarter at 3.2M shares, which represents about 7.97% of the company's float of 40.14M shares.
  • Top institutional owners: FMR LLC (11.25%), Wells Fargo & Company (10.71%) and Price (T.Rowe) Associates Inc (9.29%).
  • The grocery store focuses on fresh meats, seafood, fruits, and vegetables and heavily pushes its organic products. Zacks recently lowered its rating from neutral to underperform with a target price of 37.20. Deutsche Bank cut their price target to $40.00. UBS AG cut their price target from $63.00 to $60.00.

3. B&G Foods Inc. (NYSE:BGS): Engages in the manufacture, sale, and distribution of shelf-stable foods in the United States, Canada, and Puerto Rico.

  • Market cap at $1.59B, most recent closing price at $30.04.
  • Net institutional purchases in the current quarter at 2.9M shares, which represents about 5.63% of the company's float of 51.55M shares.
  • Top institutional owners: Columbia Fds Ser Tr II-Columbia Dividend Opportunity Fd (2.88%), Vanguard Small-Cap Index Fund (1.63%) and iShares Core S&P Smallcap ETF (1.55%).
  • The company offers few organic products and a few healthy versions of their traditional products. There seems to be a lot of room to expand on these products.

4. Farmer Brothers Co. (NASDAQ:FARM): Engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products in the United States.

  • Market cap at $225.49M, most recent closing price at $13.80.
  • Net institutional purchases in the current quarter at 256.6K shares, which represents about 16.88% of the company's float of 1.52M shares.
  • Top institutional owners: Royce & Associates, LLC (3.57%) and Dimensional Fund Advisors LP (3.08%)
  • On March 13, Farmer Bros. announced Michael Keown as the new President and CEO. He comes from WhiteWave Foods Company, a subsidiary of Dean Foods Company. WhiteWave's product lines include dairy alternatives like soy, and organic dairy products under the Horizon Organic label. Could his leadership direct the company to expand a creative organics product line?
  • BONUS: Shares shorted have decreased from 308.01K to 273.92K over the last month, a decrease which represents about 2.17% of the company's float of 1.57M shares. Days to cover ratio at 4.03 days.

5. The Hain Celestial Group, Inc. (NASDAQ:HAIN): Together with its subsidiaries Hain manufactures, markets, distributes, and sells natural and organic food, and personal care products in the United States and internationally.

  • Market cap at $2.67B, most recent closing price at $57.40.
  • Net institutional purchases in the current quarter at 3.6M shares, which represents about 9.51% of the company's float of 37.86M shares.
  • Top institutional owners: Icahn, Carl, C. (15.58%), The Vanguard Group, Inc. (5.15%) and Goldman Sachs Group, Inc. (5%).
  • On March 15 Hain "announced the launch of over 100 food, beverage, and personal care products with new flavors and product benefits to satisfy the diverse and growing consumer groups seeking natural and organic products."

6. Inventure Foods, Inc. (NASDAQ:SNAK): Engages in the development, production, marketing, and distribution of healthy/natural and specialty snack food products and frozen berry products to grocery retailers, mass merchandisers, club stores, convenience stores, and vend distributors in the United States and internationally.

  • Market cap at $138.23M, most recent closing price at $7.26.
  • Net institutional purchases in the current quarter at 1.1M shares, which represents about 8.72% of the company's float of 12.62M shares.
  • Top institutional owners: Lyon Street Capital, LLC (6.01%) and First Wilshire Securities Management Inc (5.61%).
  • Canaccord Genuity increased their price target from $8.00 to $9.00 per share. Meanwhile, Zacks lowered their rating from outperform to neutral with an $8.40 target price.

Companies that also met the food stock with institutional buying criteria, but are less focused on healthy food trends, are Susser Holdings Corporation (NYSE:SUSS): Operates convenience stores and distributes motor fuels in Texas, New Mexico, Oklahoma, and Louisiana. Net institutional purchases in the current quarter at 1.8M shares, which represents about 9.92% of the company's float of 18.14M shares. AND Casey's General Stores Inc. (NASDAQ:CASY): Operates convenience stores under the names of 'Casey's General Store', 'HandiMart' and 'Just Diesel' in the Midwestern states. Net institutional purchases in the current quarter at 2.5M shares, which represents about 6.57% of the company's float of 38.03M shares.

*Institutional data sourced from Fidelity, short data sourced from Yahoo! Finance.

Source: Hedge Funds Have A Craving For 6 Health Food Stocks