David Gaffen’s Profile
The Decade that Was: Food and Guilt
The best performing stocks of the last decade all started as penny stocks, and they combine two things Americans generally consume in great measure: worry and food.
In the “aughties,” as the decade has been called, the top three performers in the Russell 3000 among those that were in the index at the beginning of the decade were Medifast, Green Mountain Coffee Roasters, and Hansen Natural. They were up, respectively, more than 16,000 percent, 9,000 percent, and 7,000 percent.
A big part of what drives investor psyche are tangible numbers – sales, revenues, profit margins. But worry is another powerful motivating factor, and it showed in the last decade. Two of the biggest worries many Americans have, both on a personal level and societal level, were the environment, as well as the growing scourge of obesity in the U.S.
All three are food companies, and all three companies traffic in products that countermand what seem to be inexorable trends – environmental decay and waistline expansion. Medifast is a provider of “meal plans” for people looking to lose weight. Green Mountain sells coffee wholesale, offsets 100 percent of its own greenhouse gases, and donates at least five percent of its pre-tax profits to “social and environmental projects.” Hansen’s sodas are free of preservatives and artificial flavors.
All three companies piggyback the consumer spending binge of the last decade as well – and it didn’t hurt that they had tiny stock prices at the end of 1999, as all three traded for less than $1 a share.