- The gluten-free market is estimated to be $500 million to $10 billion.
- RIBT has numerous products which are used by food manufacturers to create gluten free, hypo allergenic, minimally processed and non-gmo nutrition rich products.
- RIBT is a growth company forecasted to do $2 EBITDA per share in 2014 and grow sales by 69%.
The gluten-free diet movement is all over the news and more importantly showing up in restaurant menus around the world. Reports estimate the size of the gluten-free market to be anywhere from $500 million to $10 billion.
A gluten-free diet (GF diet) is a diet that excludes foods containing gluten. Gluten is a protein composite found in wheat (including kamut and spelt), barley, rye and triticale. A gluten-free diet is the only medically accepted treatment for celiac disease. Celiac disease is an autoimmune disease attacking the small intestine due to the presence of gluten. Dermatitis herpetiformis (DH) is a form of celiac disease in which gluten causes the immune system to attack the skin; therefore a gluten-free diet is essential. People with these diseases are considered gluten intolerant. There is a minority of people who suffer from wheat intolerance alone and are tolerant to gluten. Gluten sensitivity is another reason people will choose to go gluten-free.
RiceBran Technologies (NASDAQ:RIBT) is a human food ingredient and animal nutrition company focused on the procurement, bio-refining and marketing of numerous products derived from rice bran. Rice Bran Technologies has proprietary and patented intellectual property that allows them to convert rice bran, one of the world's most underutilized food sources, into a number of highly nutritious human food ingredient and animal nutrition products. RIBT target markets are human food ingredients and animal nutrition manufacturers and retailers, as well as natural food, functional food and nutraceutical supplement manufacturers and retailers, both domestically and internationally.
RIBT has numerous products which are used by food manufacturers to create gluten free, hypo allergenic, minimally processed and non-gmo nutrition rich products used in pasta, baked goods, pizza dough, cereals, ground meats, healthy beverages and numerous other applications.
From their website:
Why Our Rice Bran?
Compared to other brans, RiceBran Technologies rice bran and derivative products are:
*Nutrient Rich (over 100 Antioxidants & co-factors)
*A Low Glycemic Index food
*Trans Fat Free
With a guaranteed shelf life of one year, RiceBran Technologies stabilized rice bran and nutrient dense derivative products are in a class of their own.
RiceBran Technologies rice bran is already becoming one of the world's leading food ingredient for:
*Rice Bran Oil
RIBT CEO W. John Short stated, "We have a focused business plan to meet our current 2014 financial guidance for full year revenues of $59 million and full year Adjusted EBITDA of $6 million. Our team is focused on delivering strong growth in the coming quarters. The expansion initiatives at Irgovel, H&N, and Dillon are all underway and when completed will enable us to grow our business substantially in the coming years."
RIBT recorded $35 million in revenue for 2013 and was not EBITDA positive. The 2014 forecast is for 69% revenue growth and $2 EBITDA per share
RIBT has approximately 3 million shares outstanding and a market capitalization of approximately $19 million. For sake of comparison with two other stocks in the food ingredient business:
Senomyx, Inc. (NASDAQ:SNMX) discovers, develops, and commercializes flavor ingredients for the packaged food, beverage, and ingredient supply industries using proprietary taste receptor-based assays and screening technologies. SNMA has a market capitalization of $319 million for forecasted revenue of $32-$35 with a loss of $10-$12 million for 2014.
Amira Nature Foods Ltd (NYSE:ANFI) engages in processing, distributing, and marketing packaged specialty rice and other food products. ANFI has a market capitalization of $459 million and trades at a trailing twelve month EV/EBITDA of 9.1.
If RIBT were to trade at 5X 2014 EBITDA that calculates to be a $10 stock and at 10X 2014 EBITDA it calculates to be a $20 stock. RIBT trades at $6.45 today. I see RIBT as a nice way to get exposure to the gluten free , Non-GMO growth in food products. That is why I am long RIBT.
I released this article at 8:15 am EST Monday May 19, 2014 on my blog at super-trades.com and to my subscription newsletter service on profit.ly at 8:15 am EST on Monday May 19, 2014.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.