Hansen Natural has become the last growth stock standing, “Mad Money” host Jim Cramer said Thursday. Will it continue to fly, or is it time to take the profits and run?
Cramer thinks this is a case where the “chart is driving the horse.” Unlike the other momentum stocks, which highly regarded Wall Street technician John Roque calls “pretty girl” stocks, Hansen still has a chart that looks good—at least on the superficial level.
But when Cramer polled the chartists who he consults regularly for “Off the Charts,” they saw very different stories on what’s next for the energy drink maker.
So, what do the fundamentals say—is this stock a buy?
Cramer thinks Hansen, which is selling for 26 times forward earnings, is too expensive here. He also sees “chinks” in its armor—the company’s operating margin declined last quarter. Plus, Hansen is trying to grow internationally since the U.S. energy drink market has begun to level off. However, that international business might be less profitable and could eventually become saturated as well. There is also a lot of competition, with Red Bull being the market leader and Coke and Pepsi sitting in third place.
“Even though Hansen’s a terrific stock, a fast-grower that also offers the consistence of the consumer staple space, I think it’s just may be way too risky for Mad Money,” Cramer said. “My advice—I would take profits.”
To see the different opinions of the chartists, watch the video.
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