The Hain Celestial Group, Inc. - Momentum

The Hain Celestial Group, Inc. (HAIN) recently hit a new multi-year high just shy of $25 after reporting a solid Q2 earnings surprise of 8% in late August. With estimates on the rise and the valuation picture in check, HAIN offers a nice helping of upward momentum.

Company Description

The Hain Celestial Group, Inc, together with its subsidiaries, distributes and sells natural and organic food and personal care products in the United States and Internationally. The company was founded in 1993 and has a market cap of $1 billion.

In spite of the relatively weak global economy, health-conscious consumers are still willing to spend a little extra cash to go organic. That trend enabled Hain Celestial to deliver strong Q2 results on August 25 that easily beat expectations.

Second-Quarter Results

Revenue for the period was mostly in line with last year at $223 million. Earnings also came in strong at 26 cents, 8% ahead of the Zacks Consensus Estimate.

The company noted that it saw strong results across multiple regions, including the United States, Canada and Continental Europe, where consumers remain focused on healthy eating in spite of economic uncertainty.

Hain Celestial's solid results were also helped by its attention to costs, with gross margin expanding to 26% of sakes from 18% last year. SG&A (sales, general and admin) expenses were also down, falling 90 Bps to 18.3%.

Balance Sheet

Hain Celestial was also busy paying off debt during the quarter, with its total debt falling $33 million to $225 million, while its cash and equivalents fell $26 million to $17 million. Its debt to equity ratio of 29% is in line with its peers.

Estimates

Estimates took a little jump on the good quarter, with the current year adding 6 cents to $1.27 and the next year up 3 cents to $1.42, a 12%.

Valuation

The valuation picture looks reasonable too, with a forward P/E of 19X compared to their peers 16X.

2-Year Chart

On the chart, shares recently hit a new multi-year high after jumping higher over the last few weeks. Look for support from the longer-term trend line on any weakness, take a look below.

 
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