Barbarian At The Gate: 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 "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 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 $40.4 million.
  • HAS has traded 488,682 shares today.
  • HAS traded in a range 270.6% of the normal price range with a price range of $1.47.
  • HAS traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 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 21.9. Currently there are 3 analysts that rate Hasbro a buy, no analysts rate it a sell, and 5 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 $6.8 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.50 and a short float of 9.4% with 12.78 days to cover. Shares are down 3.8% 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 Hasbro as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins 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:
  • HAS's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 8.2%. 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 gross profit margin for HASBRO INC is rather high; currently it is at 55.50%. Regardless of HAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.03% trails the industry average.
  • HASBRO INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HASBRO INC reported lower earnings of $2.17 versus $2.54 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $2.17).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • The debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, HAS has managed to keep a strong quick ratio of 1.87, which demonstrates the ability to cover short-term cash needs.

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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