Trade-Ideas: Hain Celestial Group (HAIN) Is Today's

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 "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 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 $62.1 million.
  • HAIN has traded 1.3 million shares today.
  • HAIN traded in a range 219% of the normal price range with a price range of $4.59.
  • HAIN traded above its daily resistance level (quality: 159 days, meaning that the stock is crossing a resistance level set by the last 159 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.

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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 33.4. Currently there are 8 analysts that rate Hain Celestial Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Hain Celestial Group has been 565,800 shares per day over the past 30 days. Hain Celestial Group has a market cap of $4.4 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.32 and a short float of 8.3% with 5.51 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Tuesday.

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 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 22.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.54, 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 1.03, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 630.21% to $48.79 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 2.70%.
  • HAIN CELESTIAL GROUP INC's earnings per share declined by 13.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($3.16 versus $2.50).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the 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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