Hormel Foods (HRL) Hits New Lifetime High

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 Hormel Foods ( HRL) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Hormel Foods as such a stock due to the following factors:

  • HRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.1 million.
  • HRL has traded 14,142 shares today.
  • HRL is trading at a new lifetime high.

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More details on HRL:

Hormel Foods Corporation produces and markets various meat and food products in the United States and internationally. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The stock currently has a dividend yield of 1.6%. HRL has a PE ratio of 23.1. Currently there are 2 analysts that rate Hormel Foods a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Hormel Foods has been 721,600 shares per day over the past 30 days. Hormel has a market cap of $13.3 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.68 and a short float of 3.2% with 3.45 days to cover. Shares are up 12.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hormel Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • HRL's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HRL's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • HORMEL FOODS CORP has improved earnings per share by 21.4% 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, HORMEL FOODS CORP increased its bottom line by earning $1.94 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.94).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Food Products industry average. The net income increased by 21.4% when compared to the same quarter one year prior, going from $113.64 million to $137.98 million.

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