Today's Water-Logged And Getting Wetter Stock: Hain Celestial Group (HAIN)

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 Hain Celestial Group ( HAIN) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hain Celestial Group as such a stock due to the following factors:

  • HAIN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.5 million.
  • HAIN has traded 2.0 million shares today.
  • HAIN traded in a range 212.8% of the normal price range with a price range of $5.03.
  • HAIN traded below its daily resistance level (quality: 54 days, meaning that the stock is crossing a resistance level set by the last 54 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on HAIN:

The Hain Celestial Group, Inc., together with its subsidiaries, manufactures, markets, distributes, and sells organic and natural products. HAIN has a PE ratio of 33.5. Currently there are 9 analysts that rate Hain Celestial Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Hain Celestial Group has been 611,000 shares per day over the past 30 days. Hain Celestial Group has a market cap of $4.3 billion and is part of the services sector and wholesale industry. Shares are up 0.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hain Celestial Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 32.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • HAIN CELESTIAL GROUP INC has improved earnings per share by 35.7% 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, HAIN CELESTIAL GROUP INC increased its bottom line by earning $2.50 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $2.50).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 68.8% when compared to the same quarter one year prior, rising from $16.39 million to $27.66 million.
  • Net operating cash flow has significantly increased by 97.41% to $53.61 million when compared to the same quarter last year. In addition, HAIN CELESTIAL GROUP INC has also vastly surpassed the industry average cash flow growth rate of 0.66%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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