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Trade-Ideas: Hillshire Brands (HSH) Is Today's Pre-Market Mover With Heavy Volume Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Hillshire Brands ( HSH) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Hillshire Brands as such a stock due to the following factors:

  • HSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $754.8 million.
  • HSH traded 3.2 million shares today in the pre-market hours as of 8:09 AM, representing 26.4% of its average daily volume.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in HSH with the Ticky from Trade-Ideas. See the FREE profile for HSH NOW at Trade-Ideas

More details on HSH:

The Hillshire Brands Company manufactures and markets meat-centric food solutions worldwide. It operates in two segments, Retail and Foodservice/Other. The stock currently has a dividend yield of 1.2%. HSH has a PE ratio of 33.3. Currently there are 2 analysts that rate Hillshire Brands a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Hillshire Brands has been 3.5 million shares per day over the past 30 days. Hillshire has a market cap of $7.3 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.79 and a short float of 3.7% with 0.38 days to cover. Shares are up 75.5% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hillshire Brands as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, HILLSHIRE BRANDS CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, HSH's share price has jumped by 72.35%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food Products industry. The net income has significantly decreased by 54.8% when compared to the same quarter one year ago, falling from $93.00 million to $42.00 million.
  • Currently the debt-to-equity ratio of 1.57 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, HSH maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.

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