Water-Logged And Getting Wetter: Hasbro (HAS)

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 Hasbro ( HAS) 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 Hasbro as such a stock due to the following factors:

  • HAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.4 million.
  • HAS has traded 353,977 shares today.
  • HAS traded in a range 212.6% of the normal price range with a price range of $1.37.
  • HAS traded below its daily resistance level (quality: 108 days, meaning that the stock is crossing a resistance level set by the last 108 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 HAS:

Hasbro, Inc., together with its subsidiaries, provides children's and family leisure time products and services worldwide. The stock currently has a dividend yield of 3.2%. HAS has a PE ratio of 21.7. Currently there are 3 analysts that rate Hasbro a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Hasbro has been 1.0 million shares per day over the past 30 days. Hasbro has a market cap of $6.9 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.44 and a short float of 10.1% with 13.93 days to cover. Shares are down 3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hasbro as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 581.0% when compared to the same quarter one year prior, rising from -$6.67 million to $32.09 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for HASBRO INC is rather high; currently it is at 57.13%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.72% trails the industry average.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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