Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Why Helen of Troy Surged This Week

Source The Motley Fool

Shares of Helen of Troy (NASDAQ: HELE) rallied this week, rising 15.3% through Thursday trading, according to data from S&P Global Market Intelligence.

Helen of Troy actually released earnings this week for its quarter ending on Aug. 31. While the numbers in and of themselves don't look great, they defied analyst expectations. But is this turnaround worth the gamble now?

Strong stock performance on low expectations

Helen of Troy is a consumer products company with a variety of brands grouped under its Home & Outdoor and Beauty & Wellness segments. In its fiscal second quarter, the company saw revenue decline 3.5% to $474.2 million, while adjusted (non-GAAP) earnings per share (EPS) decreased 30.5% to $1.21.

While these results are rather uninspiring, Helen of Troy's stock actually surged because both figures came in ahead of lowly expectations for $459 million in revenue and $1.05 in EPS, respectively. Another bright spot was that the Home & Outdoor segment actually grew 0.8% to $241.9 million, even as the Health & Beauty segment declined 7.7%. But the Home & Outdoor segment now makes up just over 50% of sales, providing hope for better growth metrics ahead.

Additionally, management maintained its outlook for the fiscal year of $1.885 billion to $1.935 billion in revenue, down 3.5% to 6%, and adjusted diluted EPS between $7 to $7.50. With the stock trading in the $62 range just prior to Wednesday's earnings, that was only 8.5 times that earnings outlook. Even after this week's surge, the stock now trades at roughly $72, just around 10 times the midpoint of the range.

Is Helen of Troy a deep value turnaround? Or a trap?

Helen of Troy continues to implement "Project Pegasus," by which it will invest $55 million in cost savings and restructuring charges through fiscal 2025 in order to achieve $75 million to $85 million in cost savings by the end of fiscal 2027. While investors await those savings, management has done a good job lowering the company's debt over the past year, from $844.9 million to $713.2 million.

With a low valuation and management working to improve profitability and pay down debt, Helen of Troy's stock could still work from here. However, investors shouldn't expect great growth from the company, so the potential rewards from Helen of Troy's turnaround efforts don't appear to outweigh the risks at this point.

Should you invest $1,000 in Helen Of Troy right now?

Before you buy stock in Helen Of Troy, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Helen Of Troy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,130!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of October 7, 2024

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonight The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

Author Suzie

Sep 22, Tue

The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

Sep 23, Wed

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anyway Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Author Irene Q.

Sep 23, Wed

Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Gold Price Forecast: XAU/USD drifts toward $4.300 with bears gaining traction Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.

Author FXStreet

Sep 23, Wed

Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.

US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth story US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

Author Suzie

20 hours ago

US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

Popular Symbols