"HAIN was up big yesterday on news of their 'internal audit.' Isn't that special," Hedgeye CEO Keith McCullough wrote earlier today. "Hedgeye Consumer Staples analyst Howard Penney gave Institutional subscribers eight reasons to short it on green."
Here's the excerpt from Penney's note:
"With this news the market has rewarded the company with a 12% increase in the stock trading at cash flow multiple in line with other high quality branded packaged food companies. We would be shorting HAIN for the following reasons:"
- Management has ZERO credibility
- Seven months ago the company missed numbers and has not provided guidance since
- Over the last seven months industry trends have slowed
- HAIN UK should trade at a discount to HAIN USA
- Consensus estimates of 3% EPS growth in 4Q16 (June) and 6.4% in FY17 do not reflect the BAD news
- The roll-up business model is broken
- The company will not be an acquisition candidate
- FY17 EPS needs to come down by 20-30%"
