Things have been less than heavenly over at Hain Celestial (HAIN - Free Report) . A rough month has seen shares go from $56 to the mid-$30s. What caused all this drama? The reasons why are enough to make this today’s Bear of the Day here.
The Hain Celestial Group, Inc. manufactures, markets, distributes, and sells organic and natural products in the United States, the United Kingdom, Canada, and Europe. Its grocery products include infant formula; infant, toddler, and kids foods; diapers and wipes; rice and grain-based products; flour and baking mixes; breads, hot and cold cereals, pasta, condiments, cooking and culinary oils, granolas, granola bars, and cereal bars; canned, chilled fresh, aseptic, and instant soups; Greek-style yogurt; chilies and packaged grains; and chocolates and nut butters, as well as plant-based beverages and frozen desserts, such as soy, rice, almond, and coconut.
There’s nothing Wall Street hates more than a delayed earnings report. The company delayed its annual filing because it’s investigating certain revenue arrangements with distributors. Some of these concessions may have an impact on their revenues and bottom line. That, added to lowered guidance, was enough to set off a huge selloff in the stock and cause several analysts to drop their earnings estimates.
Seven analysts have dropped their earnings estimates for the current quarter and current year, while six have followed suit for next year. The bearish attitude was enough to drop our Zacks Consensus Estimate for the current quarter from 60 cents to 55 cents and cut next year’s number from $2.25 to $2.11. While it wasn’t the most dramatic drop in estimates, the overall magnitude and agreement among analysts was enough to drop it down to a Zacks Rank #5 (Strong Sell).
I’m naming it a Bear of the Day not because I think it’s a good short here but as a warning just in case you’re thinking of initiating a long. Be sure to do your due diligence before jumping headfirst into a stock that’s sold off so aggressively.
Investors looking for other stocks in the same industry should investigate Zacks Rank #1 (Strong Buy) Omega Protein (OME) and Zacks Rank #2 (Buy) Cal-Maine Foods (CALM - Free Report) .
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Beyond our Bear Stock of the Day, today's list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500.
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