Searching for the Next White Wave to Ride

WWAV has been a core long-term investing idea (mostly as a buyout target) for the VIP component of Market Chess Subscription Services for a good portion of 2016, as we tracked the stock's pullback beginning last summer and culminating in February of this year. The stock had then taken the necessary steps to improve technically. 

The allure of The WhiteWave Foods Company, after French dairy food giant Danone announced acquisition of WhiteWave Foods for a value of $12.5 billion, is the impressive collection of brands centered around dairy alternatives--Mostly almond/coconut/soy milk. The Wallaby, Horizon, and Earthbound Farms brands are also impressive in their own right. 

So about a year after DMND (another specialized food play) was bought out, another speculative buyout target we had discussed for VIP Members in 2015, WWAV is receiving its buyout this morning and is up 19% as I write this. I suggested that Members in the name scale about half of their positions into this move, just in case some gamesmanship ensues about the deal. 

Going forward, the search for the next WWAV likely leads towards Hain Celestial as an obvious choice. But I suspect a better play might be Calavo Growers, an avocado producer out of California. 

On the daily chart, below, the thinly-traded CVGW is acting very well this year. The high fat avocados have a bright future in an emerging shift sugar-is-bad, healthy fats-are-good in science research. As a result, I suspect a larger firm would seek to eventually gobble them up.