FT : Big questions loom for central bankers in Jackson Hole

Big questions loom for central bankers in Jackson Hole

As investors squabble over when the Federal Reserve might lift short-term interest rates, central bankers meeting in Wyoming this week are likely to be debating what they might do if a future downturn forces them to put monetary policy into reverse.
Policymakers will meet at the mountain resort of Jackson Hole amid concerns that central banks’ recession-fighting firepower is thin, and that an overhaul may be needed for how authorities steer their way through the economic cycle.

Last week John Williams, the president of the San Francisco Fed, floated reform ideas that challenged some of the basic assumptions of the central banking tribe. Among his suggestions was the idea of aiming for a higher inflation target to boost central banks’ room for manoeuvre when a downturn strikes.
Mr Williams was not calling for changes anytime soon, but the reason for his suggestion was clear. Eight years after the crisis, an unprecedented cascade of monetary stimulus has still left many leading economies nursing pedestrian growth rates and sluggish inflation. With rates at or close to the floor, there is little or no room for further cuts to spur growth.
“This debate is really about the next recession and how much room there will be to act against it,” says Donald Kohn, a former vice-chairman of the Federal Reserve Board who is now at Brookings. “We do need a further rethink about how much scope central banks have to ease.”
Policymakers are uneasy because of evidence that the so-called neutral rate of interest — the rate that is consistent with an economy operating on an even keel — is stuck at deeply depressed levels. The possible drivers for this decline include puny productivity growth, population ageing, and a glut of worldwide savings. The phenomenon is being seen across a number of large economies, among them the US, Canada, the euro area and the UK.
With neutral rates on the floor, central banks are left with a shrinking degree of influence over the economy. They can slow activity by lifting policy rates, but there is little scope for stimulus via cuts. Tim Duy, a professor of economics at the University of Oregon, says: “Central banks appear to lack the ability by themselves to guide activity as much as they need to.”
Central bankers insist they have more tools at their disposal than some claim. In Europe and Japan central banks are experimenting with negative rates as well as asset purchases as they look for ways to ease further. The Bank of England has been spurred by Brexit in to launching a stimulus effort via a rate cut and new asset purchases.

A recent paper from the Federal Reserve Board argued that deploying rate cuts, asset purchases and forward guidance together could be even more effective than a hypothetical scenario where the central bank could cut rates as deeply into negative territory as it wanted rather than being constrained by the zero lower bound.
Nevertheless, the appeal of shooting for higher inflation is that it implies higher longer term interest rates and therefore more rate-cutting firepower when a downturn strikes. Joseph Gagnon, a former Fed economist now at the Peterson Institute for International Economics, says it is a notion whose time has come.
“If you had gone into the recession with 4 per cent inflation not 2 per cent then the whole structure of interest rates would have been higher,” he says.
Raising the inflation target is not, however, a “slam-dunk” policy change, Mr Kohn argues. Moving to a 3 per cent inflation target would require a “very serious conversation with Congress” over whether it met the definition of price stability in the Fed’s legislation, for instance.
In addition, some costs might be hard to quantify. Former Fed chairs Alan Greenspan and Paul Volcker used to define price stability as the rate where households and businesses do not have to pay attention to inflation. “Two per cent might be on the edge, but 3 per cent might be over it,” he said.
FT View

The Fed ponders making a change to its target
epa05214728 A Federal Reserve security agent prior to Chair of the US Federal Reserve Janet Yellen's press conference at the Federal Reserve in Washington, DC, USA, 16 March 2016. The presss conference comes at the conclusion of a two-day meeting of the Federal Open Market Committee (FOMC), led by Fed Chair Yellen. EPA/SHAWN THEW
Shifting the inflation goalposts should not be the immediate priority
If it lifted the inflation target, a central bank would then need to prove to the markets it could actually engineer an acceleration in price growth to that new goal. If it failed it would undermine credibility.
Some economists argue more heavy lifting will need to be done by the fiscal authorities in future downturns, rather than central banks. Mr Duy, for example, is in favour of a higher inflation target or alternatively a nominal gross domestic product target, but he also says that in the US new “automatic stabilisers” are needed in budget plans to support the economy during a downturn.
The trouble is that proposals that led to bigger budget deficits in a downturn would likely founder in the face of sceptical Republicans on Capitol Hill — just like proposals for central banks to pursue higher inflation.
For the time being, the path-breaking ideas being discussed by central bankers are likely to remain stuck in the realm of theory.

FT : Is greed good? No, it’s seriously bad for your wealth

Is greed good? No, it’s seriously bad for your wealth

Avarice, the love of money, is one of the seven deadly sins. Throughout world cultures, the belief is deep that avarice is an evil, to be avoided.
But there is also a noble intellectual tradition that holds that it is good for the economy. For the Scottish enlightenment thinker David Hume, it was “the spur of industry” — which helped to drive the “invisible hand” of the market as discovered by his fellow countryman Adam Smith.
More recently, and bluntly, Michael Douglas’ character Gordon Gekko in the film Wall Street, declared that “greed is good”.
The opposing views of the priests, and of the founding fathers of free-market capitalism, are clear enough. God and Mammon have often been in conflict. But now, armed with the tools of behavioural finance, which applies behavioural psychology to finance, it is possible to choose between the two. And fresh international research, produced under the auspices of State Street’s centre for applied research, suggests that greed is not good after all. In fact, avarice can be seriously bad for our wealth.
Psychologists now have a clear definition for love of money. It is not about any instrumental need for money to fulfil our other goals, which all of us have, but rather about a love or need of money for its own sake.
Using the Money Ethic Scale developed by Thomas Li-Ping Tang in 1992, State Street developed an Investor Love of Money Scale (ILOMS). Researchers asked interviewees in 20 countries a series of questions designed to find out how important money was to their self-esteem. They also tested how they would respond in a series of financial situations. For example, they would ask if money was a symbol of success, if they talked about it a lot, or if they wanted to be rich.
The results were clear. The more someone had an emotional attachment to money, the more likely they were to make mistakes with money. A series of behavioural biases that lead investors into predictable mistakes have been diagnosed over the years. Avarice exacerbates all those biases.
The avaricious were more likely to buy at the top and sell at the bottom — which for investors is the cardinal sin, worse than all others. They also had shorter time horizons and were more inclined to hyperactive investing behaviour. Trade frequently and you are guaranteed to pay more in trading fees, but you are highly unlikely to produce any extra returns.

Money lovers were also more likely to believe that they could wait until later in life to save — a belief which has grown even more wrong-headed as lower bond yields make it harder to buy a retirement income. And in consequence they were less likely to contribute to any retirement plan and less likely to contribute even as much as 6 per cent of their income if they had one. Hence, they ironically appear to be on course for becoming a burden on their more prudent peers.
Those who cared less about money were more likely to adopt a far better strategy and pay regular amounts into diversified retirement plans with constant allocations. Such plans effectively require taking some profits at the top and buying when securities are cheap. To use other psychological terms, they showed greater self-control or emotional intelligence. If there is any clear message from the research, it is that governments need to prod everyone ever more clearly in that direction; giving people the choice not to save, or to trade too heavily, is a recipe for disaster.
Avarice is universal, but it plainly differs according to economic development. Prosperous nations, where people have less need to worry about money, are also the least covetous of it. Switzerland and the Netherlands had the lowest ILOM scores, with the British — unsurprisingly given national embarrassment at talking about money — not far behind. The top of the list is dominated by the growing economies of the emerging world — China, India and Brazil.
There is, however, one big outlier. Despite its wealth, and despite its deep religiousness, the US is near the top of the avarice league.
This result is striking but not surprising. Money matters to people far more in the US. Look no further than the presidential campaign. One of the few things that unites two deeply disliked candidates is an Achilles heel when it comes to money. Donald Trump is plainly desperate for everyone to believe that he is rich; and Hillary Clinton often makes obvious and baffling political mistakes — such as taking a fat speaking fee from Goldman Sachs as she prepared her candidacy — because she seems to want and desire money.
Nevertheless, America built the most successful capitalist economy. So maybe David Hume was right all along. But look at the success of Wall Street. State Street’s survey suggests that to profit from people’s avarice, you should give them ample opportunity to trade too heavily and convince them they can make an easy buck. Wall Street has been built on doing just that. Those who paint the world’s biggest financial centre as profiting from greed have a point.
Avarice, indeed, is the vital ingredient for any financial industry. The market often behaves as though it is efficient. It is through irrational behaviour, indulged in by many, that the possibility of making money is created. Those who love money not wisely but too well have created the opportunity for great investors, in control of their own emotions and less in love with money, to build their fortunes.

>>> HEdge Fund Wisdom : Q2 : 13F Analisys - see pdf attached

Consensus New Buys : St Jude Medicals (STJ), Activision Blizzard (ATVI), Shire (SHPG), Liberty Global Latin Amercia (LILA / LILAK) 

Consensus Increased Positions : Alphabet (GOOG), Liberty Global (LBTYK), Allergan (AGN), PriceLine.com (PCLN)

Consensus Sold Positions : Valeant Pharmaceuticals (VRX), Gaming & Leisure Properties (GLPI).

Consensus Decreased Positions : FleetCor Technologies (FLT), Charter Communications (CHTR), Facebook (FB), Alphabet (GOOG).

WSJ : This Is Radical: Three New ETF Ideas That Actually Make Sense

This Is Radical: Three New ETF Ideas That Actually Make Sense
Perhaps the manic innovation of ETFs needs to stop, and the fund industry should go back to basics

More than 1,900 exchange-traded funds offer almost every investing strategy you could think of — and many that might occur to you only if you were drunk. Maybe the manic innovation needs to stop, and the fund industry should go back to basics.

ETFs are diversified funds that trade on an exchange as if they were a single stock; they generally track a market index at low cost and high tax efficiency. You can use them to capture the performance of cocoa or livestock or palladium or the Singapore dollar, to hold water-related stocks with high dividends, or to earn twice the opposite of the daily return on gold-mining stocks trading largely in Canada. There isn’t yet an ETF that seeks to deliver triple the return of hotel companies traded on the Stock Exchange of Mauritius, but the year is still young.

Meanwhile, plenty of solid investing ideas haven’t been turned into an ETF. So here are some ETFs we’d like to see. Simple, serious and gimmick-free, they meet basic investment needs that otherwise would go unfulfilled.

The Rest of the Market Portfolio (ticker symbol: EXME) would be a set of ETFs that own the entire stock market except those in the industry you work in.

If you’re a software engineer, for instance, EXME.T, the Rest of the Market Ex-Technology, would own all U.S. stocks except computer and other high-tech stocks. The tech sector is roughly 16% of the market; that money would be shifted proportionately over the remaining industrial sectors, giving you extra exposure to aspects of the economy that should be stronger when the tech industry weakens.

Similarly, EXME.F, the Ex-Financials fund, would own everything but bank and other financial services stocks; EXME.E, Ex-Energy, wouldn’t hold oil, gas and related companies; EXME.H, Ex-Health Care, would consist entirely of stocks outside the medical field.

Just recall the havoc that can be wrought upon retirement plans when people over-invest in the industry they work in: Many employees at Enron were wiped out when that energy firm collapsed in 2001, a mistake repeated at such Wall Street firms as Bear Stearns and Lehman Brothers in the financial crisis. More recently, workers at oil and gas companies also invested aggressively in their own company and industry, raising risk to potentially dangerous levels. EXME would scale back those hazards.

ETF manager ProShares of Bethesda, Md., launched a group of four such funds last September, although so far they have garnered only a paltry $16 million combined. They deserve more.

The Whole Planet Portfolio (ticker symbol: ERTH) would package essentially every publicly traded stock and bond on Earth into a single convenient bundle. This fund would be an ideal gift for a young investor, who could hold it for a lifetime.

Such a portfolio, says Steven Schoenfeld, founder of BlueStar Global Investors, a New York firm that designs stock benchmarks, is “the natural evolution of the idea at the heart of indexing: to own the entire market.”

As of the end of 2015, the total value of the world’s stock markets was approximately $67 trillion, according to the World Federation of Exchanges; the combined value of global bond markets was nearly $88 trillion, reckons the Bank for International Settlements.

With a few simple tweaks, the fund could be built to consist of 60% stocks and 40% bonds, with less than half from non-U.S. markets. It would likely underperform U.S. stocks alone, but it would offer the benefit of exposure to every market.

Meanwhile, conventional bond funds offer diversification, but because (unlike bonds themselves) they don’t mature, they expose investors to the risk of market losses.

Own a U.S. Treasury bond maturing in 2024, and you can be assured of receiving 100 cents back on the dollar if you hold to maturity. Own a bond fund with a similar maturity, however, and you could easily lose money if interest rates rise between now and 2024. The fund’s holdings would fall in price. And, because the fund never matures and thus never returns all your investment principal, you have no assurance of coming out whole.

So Elisabeth Kashner, director of ETF research at FactSet, the investment-information firm, proposes a line of ETFs that would hold all their bonds to maturity. Similar to Guggenheim Investments’ BulletShares and iShares’ iBonds, these ETFs would “act more like a bond,” she says. Buy them and you would be virtually assured of getting back 100 cents on the dollar upon their stated maturity date (less expenses, inflation and any defaults).

A version of these funds — I suggest the ticker symbol TRGT for “target” — could hold municipal bonds issued within a high-tax state such as California or New York. If you wanted to set money aside this year for your newborn child’s college education, you could buy an 18-year TRGT fund consisting entirely of bonds issued in your state and maturing in the year 2034.

The bonds would accrue tax-free, and you would have effectively eliminated the risk of a price decline. Even if interest rates rise between now and 2034, you should get all your money back.

So instead of putting their energy into slicing the markets into ever-narrower niches and increasingly quirky risks, fund companies should think as broadly as possible about meeting investors’ basic needs. ETFs don’t have to be weird to be good.

WSJ : Wilbur Ross’s Next Big Bet: Oil and Gas

Wilbur Ross’s Next Big Bet: Oil and Gas

Distressed-debt investor targets energy firms to swap debt for ownership amid steep drop in crude prices

Wilbur Ross, known for big investments in downtrodden industries, is betting that the oil and gas slump has dragged on long enough to shake out weaker players.

His investment firm, WL Ross & Co., has purchased hundreds of millions of dollars in troubled energy debt in a bid to take control of distressed oil and gas companies if they are forced to hand over ownership to creditors, according to people familiar with the matter. The firm sat out the early innings of the downturn, when other investors pounced on perceived bargains that continued losing value when oil and gas prices fell further.

WL Ross is angling to swap debt for ownership in Breitburn Energy Partners LP, which filed for chapter 11 protection in May, and has been buying debt of Permian Resources LLC, a Texas oil producer founded by late wildcatter Aubrey McClendon that might ultimately have to hand at least part-ownership to creditors in a restructuring, said people familiar with the matter.

The slide in oil prices that began two years ago and a resulting spate of bankruptcies have dragged down the prices of energy-company debt, sometimes to just pennies on the dollar. Distressed-debt investors such as Mr. Ross buy the deeply discounted debt but retain bargaining rights on the full face value in a bankruptcy or debt restructuring.

The strategy can deliver big gains if the companies rebound after slashing their debt. Mr. Ross used it as he built up steel and coal conglomerates that he later sold for billions of dollars.

But it isn’t without risk: Mr. Ross’s attempt to revive the U.S. textile industry has stumbled amid stiff competition from China.

U.S. crude futures are trading below $50 a barrel, down from about $100 in mid-2014. As of Aug. 1, 90 oil and gas companies had filed for bankruptcy in the U.S. and Canada since the start of 2015, according to law firm Haynes & Boone LLP.

While Mr. Ross, 78 years old, plays a less active role in the firm’s investments these days, the former Rothschild & Co. banker’s investing philosophy continues to hold sway. His deputies think now is the time to put that strategy to work in the energy industry.

The plan is to take control of oil and gas companies through debt investments and acquire companies or individual assets in traditional buyouts, according to investor materials reviewed by The Wall Street Journal. WL Ross anticipates these deals eventually could give it a platform to roll up energy assets like it did with other out-of-favor industries.

Shaia Hosseinzadeh, head of energy investing at the firm, said at a March investor meeting at New York’s Pierre Hotel the firm sees “tremendous potential” in the sector in coming years, said people familiar with the presentation.

At the time, he said the firm had spent about $300 million on distressed oil and gas company debt and planned to spend “a similar amount” more by the end of the summer, the people said.

Distressed-debt investors largely abandoned the industry last fall after early bets soured. Crude fell to as low as $27.30 a barrel in February, and even the highest-ranking debt of energy producers—first in line for repayment in bankruptcy—fell to discounted levels.

As the slump heads into its third year, private-equity firms are starting to spend the tens of billions of dollars they raised for energy investments. WL Ross, Apollo Global Management LLC, Oaktree Capital Group LLC and other investors that specialize in distressed debt are targeting the troubled producers that might be forced to hand over control to creditors.

Mr. Ross is a veteran of this distress-for-control strategy.

He pieced together bankrupt steel producers Bethlehem Steel, Acme Steel, Weirton Steel and LTV Steel to form International Steel Group in 2002. He took the conglomerate public in 2003 and sold it to Indian billionaire Lakshmi Mittal two years later for $4.5 billion. The firm made more than 12.5 times its money, a person familiar with the matter said.

In 2004, he partnered with A.T. Massey Coal Co. to buy assets from bankruptcy Horizon Natural Resources Co., using a combination of cash and debt. In bankruptcy, creditors can sometimes count the face value of their claims toward a bid for a company’s assets.

Renamed International Coal Group, the company went on to buy up smaller coal producers and, in 2011, was sold to Arch Coal Inc. for $3.4 billion. The investment made WL Ross about 2.5 times its investment, a person familiar with the firm said.

Some of Mr. Ross’s investments haven’t gone as planned. The market value of Mr. Ross’s International Textile Group Inc., a roll-up of bankrupt textile companies, has fallen to a few million dollars. WL Ross is the largest shareholder of Dallas natural-gas producer Exco Resources Inc., whose shares have lost more than 70% of their value the past two years.

Despite the risks, Mr. Ross and his team of financiers think 2016 could be one of the best years for energy private-equity investing in recent history, Mr. Hosseinzadeh said at the March investor meeting, according to attendees.

He cited a growing need among even well-positioned energy companies for cash at a time when few are able to sell bonds or stock to raise money, the people said.

In choppy markets, there is no one to “wave the white flag” giving an all-clear signal to buy, Mr. Hosseinzadeh said, according to the people.

(Re/code.net) Lyft was seeking as much as $9 billion in a buyout

Lyft was seeking as much as $9 billion in a buyout

It failed to find another buyer after GM expressed interest in acquiring the company.

Lyft will continue its fight for marketshare alone, at least for now.

The ride-hailing startup that’s become a perennial runner up to global behemoth Uber had recently sought as much as $9 billion in a buyout offer but failed to secure serious interest, sources told Recode.

After General Motors, a Lyft investor, expressed the possibility of buying the company, the startup hired investment bank Qatalyst to solicit competing offers from other potential buyers, a common practice after receiving buyout interest. It approached Google parent Alphabet, Amazon, Microsoft and even Apple, sources say.

Lyft eventually brought its $9 billion asking price down during conversations with potential suitors, but none of the tech companies ended up placing a bid, according to a source familiar with the talks.* GM never made a formal bid, people familiar said.

Lyft’s latest funding round valued the company at $5.5 billion.

Representatives for Lyft, Alphabet, Apple, Microsoft, Amazon and Qatalyst declined to comment.

The New York Times first reported on the negotiations but its story didn’t indicate a potential deal price. The Information first reported on GM expressing interest in acquiring Lyft.

Lyft nonetheless remains positive about its financial prospects. In a leaked letter to investors, Lyft also indicated that it expected to continue to set new records and saw more than six time growth in its revenue between 2014 and 2015. In fact, Lyft has $1.4 billion in the bank, according to a source close to the company. That’s enough to get the company to profitability, the source contended. Yet there are no signs the company, which at its peak saw 14 million rides a month, can catch up to Uber, which did 62 million rides in the same month.

Now that Uber has unloaded its China operations, a money pit by many estimates, it’s free to focus on its other priorities — one of which is winning in the U.S.

In that case, finding a buyer may be Lyft’s best option.

While it’s not out of the realm of possibility that these companies could make a bid on the company at a later time, it’s become clear that at present Lyft has few options outside of selling to G.M.

For one, Uber isn’t slowing down. The company’s move to pull out of China may have been a signal that the company was accepting defeat in its largest market but it also was a sign that Uber CEO Travis Kalanick is preparing to take the company public — several sources expect the company will do so in 2017.

To attain a better IPO position, sources say it’s in Uber’s best interest to either drive its only U.S. competitor out of the market or at least significantly handicap it. With its recent $1 billion infusion from Didi, Uber has the resources to do so through subsidies and promotions.

A subsidy war would, however, be more expensive for Uber given its ride volume. Since Uber performs tens of millions more rides than Lyft performs per month, the company would be subsidizing more rides than Lyft does. But that’s not exactly a death sentence for Uber given that it also has more money to spend.

Without the resources of a larger company like General Motors, which has a vested interest in preserving Lyft’s viability given its collaboration with the company on a network of self-driving cars, it’s unlikely Lyft will be able to sustain a prolonged subsidy war with Uber, according to sources.

There is, of course, still the possibility that Lyft could be acquired by another automaker like Ford or even Tesla — both of which need a ride-hail partner to achieve some of its ambitions to create a shared network of self-driving cars.

But it’s unlikely GM would relinquish a relationship that gives them an edge at a time that automakers are scrambling to ramp up their self-driving efforts.

* A source close to Lyft disputes the claim that Qatalyst lowered the asking price below $9 billion.

NY Post : Marriott has buyer’s remorse over Starwood megamerger

Marriott has buyer’s remorse over Starwood megamerger

Marriott was eager to get into bed with Starwood. Now some of the excitement has worn off.

The $12 billion hotel megamerger is taking longer to close — thanks to Chinese authorities extending their review — and is turning out to be less enticing than Marriott had envisioned, according to sources.

“There is a notion of remorse,” said one source close to the deal.

Last week, the Chinese Ministry of Commerce said it needed an additional review period that could last as long as 60 days.

The delay raised concerns that the deal was in trouble, especially since Marriott beat China’s Anbang Insurance Group in an all-out bidding war for Starwood.

Just last month, Marriott Chief Executive Arne Sorenson said he was “optimistic” that the deal would close in the coming weeks.

Marriott does not own real estate and plans to sell Starwood’s roughly $2 billion of property. The longer the deal takes, the greater the risk hotel real estate prices fall.

“We know we are in the last stages of the real estate hotel cycle and so the risk for them is they would be left owning real estate for an extended period of time,” said David Katz, managing director at the Telsey Advisory Group.

China’s review is the last regulatory hurdle to the deal.

“The board and management of Marriott International are looking forward to integrating the companies once the approval from China is obtained,” according to a statement from the company.

“Marriott continues to believe that the planned merger transaction poses no anti-competitive issues in China and we are looking forward to closing promptly following Chinese regulatory approval.”

The combination of Marriott, which owns the Ritz-Carlton and Courtyard Residence brands, with Starwood, whose roster includes Sheraton and Westin, will create the world’s biggest hotel operator, surpassing Hilton Hotels.

While it sounds great on paper, there’s growing unease at Marriott about the integration with Starwood. In particular, Marriott execs are concerned about the compatibility of combining Starwood’s loyalty-rewards program with its own, said one source.

Starwood, through brands like W Hotels, has a younger and more affluent clientele that is used to a more flexible points system than the staid Marriott brand, according to Katz.

“This isn’t exactly what they thought they were buying,” said the source.

Marriott declined to comment on the integration.

Nevertheless, Bill Marriott, who controls the family-founded hotel chain, has expressed confidence in CEO Sorenson, who came up with the idea of buying Starwood, said one source.

Last month, Sorenson embarked on a global tour of Starwood offices weeks earlier than expected so he could push the integration. At the same time, he’s also preparing to eliminate some Starwood executives, which doesn’t make it any easier, said a source.

Given the rough road ahead, Marriott may not shed any tears if China comes down against the deal.

Not gaining Chinese approval “would be a good emergency exit for Marriott,” Katz said.

NY Post : Hain Celestial can blame their stock flop on themselves

Hain Celestial can blame their stock flop on themselves

Modal Trigger Hain Celestial can blame their stock flop on themselves

The king of the supermarket health food aisle is under attack — again.

And this time the company’s wounds are somewhat self-inflicted.

Hain Celestial Group, which for 23 years has been the virtuous packaged food company, selling fare that doesn’t contain trans-fats, GMOs, artificial colors or high-fructose corn syrup, saw its stock get hammered last week after it announced on Aug. 15 that it will delay its annual report because of accounting issues.

The company — maker of Earth’s Best baby foods, Terra chips and Health Valley products, among many other brands — said it was looking into the timing of when certain sales were booked.

The news, which also included Hain saying it didn’t expect to hit 2016 sales and profit targets, knocked its shares down 30 percent this week, to $38.90 at Friday’s close.

The stumble helped shine a light on its recent performance — which shows that the company may be losing its long-held edge as rivals pick off shelf space.

“Hain is in a dogfight now with larger, well capitalized food companies,” said Piper Jaffray analyst Sean Naughton, who downgraded Hain to underweight from neutral last week. “We think the risks from traditional competitors and internal financial control risk make the stock difficult to own,” Naughton wrote in a note.

Those traditional rivals, like Campbell Soup Co., General Mills and Hormel, have been bingeing on smaller companies producing organic and natural products and expanding their turf in supermarket food aisles.

Stores are turning away from Hain’s because of price. Campbell’s recently acquired Plum Organics, a baby food and products company whose prices are lower than Hain’s Earth’s Best and Ella’s Kitchen lines.

General Mills is stealing other shelf space after buying Annie’s, a line of organic cereals, pastas, snacks and yogurts.

Price and increased competition has seen Costco, Walmart and Target cut back on the number of Hain items they stock, from an average of 202 in 2014 to 191 this year, according to an analysis by Piper Jaffray’s Naughton.

Excluding revenues from acquisitions, its sales gains have shrunk to the low single digits from the mid-to-high single digits over the past four quarters, according to an analysis by Piper Jaffray.

For decades, Hain grew alongside its No. 1 distributor, Whole Foods. But as rival food makers jumped into the sector, its sales gains at Whole Foods slowed.

“Natural and organic used to be Whole Foods’ and Hain’s exclusive domain,” said Morningstar analyst Zain Akbari.

Despite the headwinds, Hain remains optimistic.

“We see [competition] as a validation of our business model and expect to remain an industry leader by leveraging our decades of experience,” it said in a statement.

>>> Barron's weekend: positive on FB

Barron's weekend: positive on FB 

Cover story: Donald Trump and Hillary Clinton's views on free trade are wrong, since they don't take into account the benefits cheap imports bring, including jobs that more costly imports can destroy; nor do they see that a widening trade deficit correlates with prosperity while a shrinking one is tied to slumps and recessions. 

Features: 1) Profile of Paul Britton, founder of the Capstone Volatility Master fund, uses an unusual alternative strategy that seeks to profit from volatility spikes and which involves owning only a few underlying securities; 2) Positive on FB: Wall Street analysts predict the social site's shares could hit $153 in a year, for a further gain of 20%, with profits growing steadily and stronger advertising sales; 3) Positive on Liberty Braves Group: Shares of the stock that tracks the Atlanta Braves could benefit from increased ticket sales and concessions when the team moves into a new stadium, and deliver 20% returns; 4) A look at what top investors, including George Soros, Warren Buffett, David Einhorn, Jeffrey Ubben, and Carl Icahn, are betting on, with AIG, C, GS and MS being favorites and all but Buffett dumping AAPL; 5) Review of a new book, "Winning at Active Management," explains why it's hard for investors to beat the index, and how they can go about doing so.

Tech Trader: Cautious on CSCO: Recently announced layoffs at the networking major are sign that its market opportunity is being eroded by the shift of computing activity to cloud services run by AMZN, MSFT, and others. 

Trader: In the markets, "plenty of cash remains on the sidelines, but a 2% to 3% pullback could draw in folks who have been either short or have missed this latest rally over the past six weeks," says Andrew Ahrens of Ahrens Investment; Positive on C: Shares of bank look cheap for investors with long-term horizons, and they could provide a double-digit percentage annual return during the next two years; The rising popularity of various derivatives, such as options, among others, has stolen volume from equities. 

Interview: Stephanie Pomboy, founder of MacroMavens, continue to like government bonds because economic growth won't be a catalyst to push rates higher, and she says investors should look for a repricing of credit risk. 

Follow-Up: Positive on MAT: Barron's foresees a strong holiday season for the toymaker, and a further 20% return during the next year, including dividends; Cautious on HAIN: Company "may eventually find an acquirer, but until the cloud dispels from its books, the stock is going nowhere"; + LafargeHolcim: Cement giant has delivered synergies following the merger of Lafarge and Holcim last year and has cut staff and trimmed fat, all of which should help the shares rise. 

European Trader: Positive on SpareBank 1 SR Bank and SpareBank 1 SMN: Norwegian regional savings banks are among the firms doing well in the troubled European banking sector, partly because Norway's economy, though tied to oil, is thriving. 

Asian Trader: China may not be as scary as some investors have made it out to be, but its stocks can't have a reasonable rally less bank shares participate. 

Emerging Markets: The MSCI Emerging Markets index is up about 35% from its January low and should continue to rally, according to Calamos Investments. 

Commodities: Gold has made an impressive comeback, and investors hope the rally will continue as many of the factors that have driven it remain in force. 

Streetwise: Positive on CRL, APC, WLL: Guggenheim's Subash Chandra says these energy companies may be on the verge of seeing gains because of higher production targets.