Hain Celestial Enters Buy Zone

Hain Celestial Enters Buy Zone

Hain Celestial Enters Buy Zone

After surviving a salmonella recall and rice factory fire, natural foods maker Hain Celestial tops Q4 earnings and breaks out.

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2015-02-19T11:33:00

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Matthew Galgani

If you want a company that can take a beating and still beat on earnings, check out Hain Celestial (NASDAQ:HAIN).

Despite a recall of nut butter for possible salmonella contamination, a fire in a U.K. rice factory and foreign exchange rate challenges, the natural foods maker topped earnings estimates and broke out of a flat base this week.

Hain continues to show strength in its wide range of natural and organic foods and beverages, which it sells through Whole Foods Market (), Sprouts Farmers Market (NASDAQ:SFM) and other specialty and mass-market retailers. CEO Irwin Simon also sees big opportunity in personal care products.

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Key Fundamentals

Sales growth has been strong and steady, ranging from 17% to 33% over the last eight quarters. Although earnings growth has slowed somewhat recently, on Feb. 4 Hain topped fiscal Q2 estimates with a 26% gain.

Hain Celestial's return on equity is a little light at 11% but is boosted by a 32% three-year annual EPS growth rate. The stock earns a solid 96 IBD Composite Rating out of a possible 99.

Hain's A- Accumulation/Distribution Rating and 1.1 Up/Down Volume Ratio point to institutional demand, The sharp rise in fund ownership last quarter confirms the demand.

Chart Analysis

Hain's most recent consolidation is a late-stage flat base, with a 60.55 buy point. Later-stage patterns can work but are riskier than first- or second-stage formations.

The stock recaptured its 10-week line earlier this month and has been closing at the top of its weekly price range. Also, its Relative Strength line has headed into new high ground.

On Wednesday, Hain cleared the buy point, but volume was relatively light, at just 13% above average.

The buy range is up to 5% above the ideal buy point. For Hain Celestial, that's from 60.55 to 63.58. As of early Thursday morning, Hain was still trading within that zone.