Retail

More Growing Concern in Hain Celestial

Jon Ogg
Hain Celestial Group Inc. (NASDAQ: HAIN) is taking it on the chin on Monday after Barron’s highlighted some growing risks over the holiday weekend. While we might normally be inclined to disagree with this outlook, there are some very serious concerns.

Barron’s showed that the growth rate may be very hard to sustain for what is already a very pricey stock. If you use the Thomson Reuters consensus estimates and Friday’s closing price of $62.20, the forward earnings multiples are 25.7-times for the fiscal June 2013 year and 21.8-times the fiscal June-2014 estimates.

The two issues Barron’s highlighted were stronger or growing competition and the ability to sustain the company’s past acquisition pace. As it stands now, the analysts are already looking for sales and earnings growth. Acquisitions may alter that, but this is the consensus for now.

The problem here is that the consensus target of $70.64 is less than the recent highs. The consensus analyst group implies that the stock has became fully priced. History has shown over and over that stocks often take a beating when the underlying company’s growth rates of the past become hard to match. Unfortunately, that can sometimes happen even if companies manage to meet their growth rate expectations. Hain Celestial may be down from its peak, but if you did not take a market sell-off into consideration, this still feels like a situation where it is priced for perfection.

Hain now is worth about $2.8 billion, and the $62.20 price compares to a 52-week range of $33.72 to $73.72. The most recent bounce is still not incredibly strong when you consider that the high was seen in early September and shares fell under $58 by the end of October. Keep in mind that this stock has more than tripled in the past two and a half years and the gains from the lows of the recession have been more than 300%.

Based on the concerns brought up, this stock is down 2.8% at $60.41 so far on Monday.

JON C. OGG

Are You Still Paying With a Debit Card?

The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.

Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!

Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!

 

Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.