Newell Rubbermaid (NWL) Stock: Sealed Tight for the Long Haul
NEW YORK (TheStreet) -- Thanksgiving is two weeks away but I am thinking about everything that has to get done in advance and afterwards, and Newell Rubbermaid (NWL) - Get Report comes to mind.
Summer sell-off -- what summer sell-off? This chart of NWL, above, has everything going for it. NWL is rising with our two favorite moving averages (50-day and 200-day), the On-Balance-Volume (OBV) line is going up as well as the trend following Moving Average Convergence Divergence (MACD) oscillator.
This longer-term view of NWL, above, is even more textbook-looking. Prices are above the rising 40-week moving average. The OBV line is steady and the MACD oscillator is turning up again. The charts say we should stay long for the holidays.
TheStreet Ratings team rates NEWELL RUBBERMAID INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate NEWELL RUBBERMAID INC (NWL) 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, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market, NEWELL RUBBERMAID INC's return on equity exceeds that of both the industry average and the S&P 500.
- 42.32% is the gross profit margin for NEWELL RUBBERMAID INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.77% is above that of the industry average.
- Net operating cash flow has remained constant at $339.90 million with no significant change when compared to the same quarter last year. Even though NEWELL RUBBERMAID INC's cash flow growth was minimal, the firm managed to surpass its industry's average growth rate of -144.79%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.10% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: NWL
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.