Hain Celestial: Natural Breakout?

12/03/2014 8:00 am EST

Focus: STOCKS

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Our latest breakout candidate is a leader in the food sector; it makes organic and natural food products, notes technical specialist Leo Fasciocco, editor of Ticker Tape Digest.

Hain Celestial Group (HAIN) makes infant formula, rice, non-dairy beverages, frozen desserts, baking mixes, breads, cereals, pasta, and condiments. It also makes gluten-free frozen entrees, ethnic meals, and specialty teas.

Since falling to $11 in 2009, HAIN has streaked higher in an awesome bull market that has carried the stock to a new high of $113.56.

The latest move carries the stock to a new all-time high. The move was triggered by HAIN voting a 2-for-1 stock split. The push to a new is bullish and could bring in more buying.

The stock's momentum indicator is solidly bullish. The accumulation-distribution line is in a solid uptrend showing good underlying buying.

HAIN's net for the upcoming fiscal second quarter ending in December should rise 24% to $1.08 a share from 87 cents a year before. 

The highest estimate on the Street is at $1.12 a share. We see chances for a slight upside surprise.

HAIN's earnings for the fiscal year ending in June of 2015 should climb 21% to $3.84 a share from $3.17 a year ago. The stock sells with a price-earnings ratio of 29. That is high given the earnings growth rate.

Going out to fiscal 2016 ending in June, the Street looks for a 14% increase in net to $4.39 a share from the anticipated $3.84 this fiscal year.

We rate HAIN more of a trading play and not a long-term play due to its high valuation at this time. We are targeting HAIN for a move to $130 off this split. A protective stop can be placed near $107, which is tight.

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