Church & Dwight (CHD) Stock: Weak at the Knees
NEW YORK (TheStreet) -- The share price of Church & Dwight (CHD) - Get Report has gone nowhere this year, but a recent deterioration in the technicals makes the chart look toppy now.
The price of CHD has largely been stuck in a $10 trading range the past 12 months -- from around $80 on the downside and around $90 on the upside. See chart above. In the past few weeks, the pattern has weakened. The slope of the 50-day simple moving average is now negative, and the 50-day is about to cross below the 200-day moving average to generate a sell signal. The On-Balance-Volume (OBV) line turned lower in October, indicating that selling has increased on down days. Lastly, the Moving Average Convergence Divergence (MACD) oscillator below the zero line.
A weakening picture also comes across from this chart, above. The 40-week moving average is curling over and the OBV line is neutral. In the lower panel we can see that the MACD oscillator is approaching the zero line from above.
TheStreet Ratings team rates CHURCH & DWIGHT INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate CHURCH & DWIGHT INC (CHD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 17.2%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- CHURCH & DWIGHT INC has improved earnings per share by 5.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHURCH & DWIGHT INC increased its bottom line by earning $3.01 versus $2.78 in the prior year. This year, the market expects an improvement in earnings ($3.24 versus $3.01).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Household Products industry average. The net income increased by 3.9% when compared to the same quarter one year prior, going from $115.90 million to $120.40 million.
- 47.57% is the gross profit margin for CHURCH & DWIGHT INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.97% trails the industry average.
- You can view the full analysis from the report here: CHD
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.