In this chart of K, above, we can see it has been stalled for the past two years. Rallies stall at $70, but notice how the dips make higher lows: $56, then $59 and then $61.
In the longer-term picture of K, below, we can see a stock that had a nice rally up from the $40s before the current sideways consolidation. Also, we need to point out the rising On-Balance Volume (OBV) throughout this time period. This tells us that volume has been higher on weeks when K closed higher, a positive technical sign. The Moving Average Convergence Divergence oscillator is also in a bullish position.
In the last chart, above, we show the intraday price action, ignoring time and volume. This Point and Figure chart shows us where K might rally to once it breaks out over $70. The Point and Figure "count" gives us a longer-term price target of $92. Definitely not a strikeout!
Separately, TheStreet Ratings team rates KELLOGG CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate KELLOGG CO (K) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its 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:
- 44.23% is the gross profit margin for KELLOGG CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.37% is above that of the industry average.
- Net operating cash flow has increased to $446.00 million or 15.54% when compared to the same quarter last year. In addition, KELLOGG CO has also modestly surpassed the industry average cash flow growth rate of 8.54%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- KELLOGG CO's earnings per share declined by 23.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, KELLOGG CO reported lower earnings of $1.74 versus $4.95 in the prior year. This year, the market expects an improvement in earnings ($3.52 versus $1.74).
- The change in net income from the same quarter one year ago has significantly exceeded that of the Food Products industry average, but is less than that of the S&P 500. The net income has decreased by 24.4% when compared to the same quarter one year ago, dropping from $295.00 million to $223.00 million.
- You can view the full analysis from the report here: K