Helen of Troy: A Strong Buy on Heath & Wellness Presence - Analyst Blog
On Jun 19, Zacks Investment Research upgraded Helen of Troy Ltd. HELE to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Helen of Troy has been witnessing upward estimate revisions ever since it reported higher-than-expected sales and earnings during the fourth quarter of fiscal 2015 on Apr 28. The company’s growing presence in the Personal Care and Health and Wellness category helped it to deliver positive surprises in three of the last four quarters, leading to an impressive average positive earnings surprise of 26.11%.
Moreover, the personal care segment outperformed the market in the first half of fiscal 2015. We are also encouraged by Helen of Troy’s increasing presence in the health and wellness category. In Sep 2014, the company acquired Healthy Directions to foray into the health business.
The takeover made it easier for Helen of Troy to enter the growing vitamins, minerals and supplements (VMS) category which seems to have a bright future. According to Nutrition Business Journal, the VMS market is expected to continue to grow at a mid-to-high single-digit rate annually through 2020. Moreover, per the journal, more than 70% of U.S. population, aged 55 and above, took vitamin supplements in 2013.
During its fourth quarter earnings conference call, Helen of Troy stated that it expects to deliver sustainable organic growth by investing in human resource and innovation program, brand building advertising and improving its market position. The company is also focused on driving productivity and paying dividends.
Almost all the estimates were revised upward over the past 60 days. The Zacks Consensus Estimate for fiscal 2016 gained almost 2% to $5.44 per share from $5.36 in the same time frame.
Other Stocks to Consider
Other stocks in the consumer staple sector that are performing well at the current levels include Inter Parfums Inc. IPAR, Guess? Inc. GES and G-III Apparel Group Inc. GIII. All these stocks sport a Zacks Rank #1.
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GUESS INC (GES): Free Stock Analysis Report
G-III APPAREL (GIII): Free Stock Analysis Report
INTER PARFUMS (IPAR): Free Stock Analysis Report
HELEN OF TROY (HELE): Free Stock Analysis Report
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