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
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Hormel Foods as such a stock due to the following factors:
- HRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.2 million.
- HRL has traded 160,476 shares today.
- HRL is trading at 6.42 times the normal volume for the stock at this time of day.
- HRL is trading at a new low 3.01% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on HRL:
Hormel Foods Corporation produces and markets various meat and food products in the United States and internationally. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The stock currently has a dividend yield of 1.5%. HRL has a PE ratio of 25.1. Currently there are 2 analysts that rate Hormel Foods a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Hormel Foods has been 680,300 shares per day over the past 30 days. Hormel has a market cap of $14.4 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.72 and a short float of 2.6% with 4.35 days to cover. Shares are up 20.3% year-to-date as of the close of trading on Friday.
rates Hormel Foods as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- HRL's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HRL's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
- HORMEL FOODS CORP has improved earnings per share by 21.4% 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, HORMEL FOODS CORP increased its bottom line by earning $1.94 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.24 versus $1.94).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food Products industry average. The net income increased by 21.4% when compared to the same quarter one year prior, going from $113.64 million to $137.98 million.
- 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 29.83% 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 Hormel Foods Ratings Report.