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The Hain Celestial Group, Inc. Message Board

  • captainwho2 captainwho2 Feb 6, 2013 10:01 PM Flag

    Comparison of HAIN vs S&P500 avgs

    What's Wrong With This Picture (data from finvizDOTcom)?

    Data_____________________S&P500 Avg_______HAIN

    P/E______________________28.08_____________26.50
    Forward P/E_______________16.90_____________20.51
    EPS Growth (next yr)_______ +16.19%__________+29% to +33% (from HAIN guidance)

    So HAIN actually has a slightly lower P/E than S&P500 avg. (5.6% lower)
    HAIN has a higher Forward P/E (21.4% higher)
    HAIN has a much higher EPS Growth next year (79.1% to 104% higher)

    In order to reward HAIN for it's higher EPS Growth, the Forward P/E "could" come up to 30.27 to 34.45

    Since the stock last traded at $58.04, the price "could" come up to $85.66 to $97.49 (+47.6% to +68.0%).

    At any rate, it definitely deserves a MUCH HIGHER multiple.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Current pe on S&P is between 17 and 18 and forward is 13 to 14.

      The company had it's big bump in the past 2 years with the large sales increases, the sales growth is slowing somewhat (when you back out growth due to purchased companies) but is still above the industry average.Add to that the pe expansion that we are seeing on old line brand companies moving towards the 20 range due to the low interest rate environment and ending the year in the 70s is not out of the question.

      The pe should move below 30 as the sales growth decelerates. I would expect about 75 with a pe under 30 by the end of the year.

      All bets are off if they buy more companies during the year.After all if they buy a company for a 15 pe and fold it into their company and the market assigns it the 30 pe of Hain ,then the stock will double the value of the purchase price before Hain does anything at all.

      • 2 Replies to dogma_blade
      • "Current pe on S&P is between 17 and 18 and forward is 13 to 14."

        As far as I have been able to determine that is incorrect, at least according to what I calculate from finviz data, downloaded to spreadsheet, and you still haven't told me what your source is. For the groups or indexes, I have weighted each companies data according to shares outstanding:

        Desc___P/E___Forward P/E___PEG___EPS Growth This Yr___EPS Growth Next Yr___EPS Growth Next 5 Yrs

        S&P500___26.59___14.20___10.19___131.3%___14.01%___9.47%
        Industry___22.54___16.94___2.49___32.11%___11.37%___9.04%
        HAIN___27.41___21.21___1.64___55.20%___16.94%___16.67%

        Unweighted Avgs. (which should NOT be used for comparison with HAIN):

        S&P500___28.13___16.94___5.46___34.75%___16.19%___10.51%
        Industry___31.62___19.27___2.62___66.96%___24.24%___13.78%

        Note: The huge PEG Ratio of 10.19 compared to the unweighted value of 5.46
        and likewise the huge EPS Growth This Yr of 131.3% compared to unweighted value of 34.75%. This is probably due to the large variations of shares outstanding from company to company within the vast S&P500 index.

      • "Current pe on S&P is between 17 and 18 and forward is 13 to 14."

        Are those figures weighted according to shares outstanding? I'm wondering why the discrepancy.

        I downloaded the entire S&P500 index companies from finviz stock screener to a spreadsheet and then calculated the averages (without any weighting).

    • The math does not add up on this example.
      If a company (HAIN) has a lower pe than the index and its profits are supposed to rise faster than the indexes for the next year, then the forward pe cannot be higher than the index based on the starting prices.

      In other words if the indexes profits only rise 16.9% how does the average pe drop between 30 and 40%?

    • I am not making a PREDICTION, I am simply trying to determine if HAIN is currently UNDERVALUED and making some rough guesstimates as to how high the stock would theoretically CURRENTLY be priced at so as to NOT be undervalued compared to other groupings such as the S&P500 and HAIN's Peers in its Industry grouping.

      A prediction has to do with what the stock would be trading at some time in the future and that will have a lot to do with what happens in the broader market as well as whether or not the market wakes up to the fact that this stock in very undervalued (in my opinion) AND how well they are able to perform relative to their forward guidance. dogma_blade are you still confused now? If so, I can't help you any further.

      • 1 Reply to captainwho2
      • I don't need your help at all. Doing just fine.

        It seems to me that you started with your conclusion and have tried to skew the indexes to sell what you believe.Whatever helps you sleep at night.

        I will admit that it was nice to have the stock go up over 250% in the last 3 years , but based on growth and valuations I do not think that the stock is going to grow that fast in the coming year.

        By the way the stock should eventually reach the numbers that you put as your range if they are open ended estimations of potential future stock prices with no target date.

        You have still not explained why a stock with decelerating growth and where the profits are supposed to decelerate also going into next years numbers should have pe expansion.

        The pe on this stock rose when the profit growth started to explode,other than a good purchase and the continued pe expansion of old line consumer product stocks I do not see what the catalyst would be.

        Out of curiosity, why would you think I am unwinding a short position when I am calling for 25 to 30% appreciation in the stock for the year? Just because I question your call for 60% appreciation?

 
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