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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $37.8 million.
- HSH has traded 488,274 shares today.
- HSH traded in a range 202.1% of the normal price range with a price range of $1.16.
- HSH traded above its daily resistance level (quality: 78 days, meaning that the stock is crossing a resistance level set by the last 78 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher. 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 2.2%. HSH has a PE ratio of 20.9. Currently there are 2 analysts that rate Hillshire Brands a buy, 1 analyst rates it a sell, and 3 rate it a hold. The average volume for Hillshire Brands has been 1.0 million shares per day over the past 30 days. Hillshire has a market cap of $3.9 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.86 and a short float of 1.5% with 1.68 days to cover. Shares are up 11.3% year to date as of the close of trading on Friday. 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 impressive record of earnings per share growth, notable return on equity and increase in stock price during the past year. 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:
- HILLSHIRE BRANDS CO reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, HILLSHIRE BRANDS CO turned its bottom line around by earning $1.49 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.49).
- 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 where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The gross profit margin for HILLSHIRE BRANDS CO is currently lower than what is desirable, coming in at 27.96%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.26% trails that of the industry average.
- Net operating cash flow has significantly decreased to $71.00 million or 81.74% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Hillshire Brands Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.