Meat products maker Hormel faces challenges amid rising feed costs due to inflation, and reduced feed stock amid Putin's war on Ukraine. On Sept. 1 Hormel Foods lowered its 2022 earnings guidance. But it also raised its full-year sales outlook. Investors seem satisfied and on Wednesday Hormel stock reached an important technical milestone. Its Relative Strength (RS) Rating jumped into the 80-plus percentile with an improvement to 81, up from 78 the day before.
The raised 81 RS Rating shows that Hormel stock is among the top 19% on price performance. Market research shows that the top-performing stocks often have an RS Rating north of 80 as they begin their biggest climbs. Hormel is now in that elite group.
Hormel Stock Seeks Institutional Support
Among its other key ratings Hormel has a 70 EPS Rating, a 77 Composite Rating and a strong B SMR Rating (sales+profit margins+return on equity), on an A to E scale with A tops. One yellow flag is its D- Accumulation/Distribution Rating. That shows big institutional investors like ETFs and mutual funds aren't on board with Hormel stock yet.
Take Our Anonymous Survey And Tell Us What You Like (And Don't Like)
About Your Online Broker. Ten Participants Will Win A $50 Amazon Gift Card.
Hormel is one of the country's largest meat producers, selling beef, pork, chicken and turkey products as well as shelf-stable items such as Planter's brand peanuts, Corn Nuts brand snacks, and Dona Maria brand mole, salsa, guacamole and chips. Those items help buffer the stock because the packaged foods group is rising as investors seek shelter amid high inflation rates.
Its stock is a Steady Eddie that grows at a moderate but steady pace. It has a 4 Earnings Stability Factor on a 0-to-100 scale. When it comes to a stock's Earnings Stability Factor, the lower the better, with the best-possible being a rating of 0.
Looking For The Best Stocks To Buy And Watch? Start Here
Hormel stock hit an all-time intraday high at 55.11 on April 11. It consolidated from there, falling 6.6% on Sept. 1 on lower-than-expected, single-digit earnings and revenue growth last quarter. It's climbed back though and traded above 46 Wednesday afternoon, up for the day. Hormel is trying to complete a consolidation with a 55.21 buy point. See if it can clear the breakout price in heavy trade.
Coming Off A Light Quarter
The company reported 3% earnings growth last quarter to 40 cents per share, while sales grew 6% to $3.03 billion. In the prior three quarters Hormel Foods reported 19%, 7% and then 14% EPS growth. Its sales during that time rose 43%, 24% and 19%.
Hormel Foods earns the No. 3 rank among its peers in the Food-Meat Products industry group, according to MarketSmith. Mexico's Industrias Bachoco and Cal-Maine Foods are also among the group's highest-rated stocks.
When researching the best stocks to buy and watch, a stock's relative price strength is a good indicator.
IBD's unique Relative Stregnth Rrating tracks market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price performance over the trailing 52 weeks compares to all the other stocks in our database.
Please follow James DeTar on Twitter @JimDeTar
