We are assessing all of our open trades pretty intensely today. This particular blog entry is only one of three you’ll want to check out… the list of trades we want to keep holding, as they offer the most potential. (The other two commentaries focus on trades we know we don’t want, and trades we’re not sure about.) Take a look.

Hansen Natural Resources (HANS) - We blogged about Hansen in great detail Monday, so we’re not going to go into it again here. Just click here to revisit those thoughts. For now, we’ll just sum it up by saying this has been one of our more productive trades, and the one we’re absolutely most optimistic about.

Edwards Lifesciences Corp. (EW) - This is definitely one we want to keep, as we think the recent recovery effort really will take hold. The sharp dip in late February never fostered any follow-through, and we’re starting to see some bullishness brewing.

Briggs and Stratton (BGG) - We liked Briggs and Stratton for fundamental reasons, and we still do. So, despite the recent decline, we want to hang onto BGG. Besides, the decline appears to have leveled off over the last six days. We may be on the verge of moving hgiher again for this longer-term position. Sit tight.

One thing we want to reiterate…. as tough as it can be to remain net long in a crappy environment like this one, it’s not necessarily a good idea to be completely out of the market. That’s why we want to be invested at all right now, and the quality of these three stocks makes them the “best of breed” in our view.

We’ve referenced a similar stat before, but I heard a slight variation on it yesterday…. 30% of what was lost in a bear market is recovered in the first 40 days of the next bull market.

It wasn’t clear if that was 40 trading days or 40 calendar days, but it doesn’t matter…you get the idea. As much of a mess as things are right now, we still contend we’re closer to a bottom than not. You don’t want to not be in some stocks for the point in time when things start to improve (even if it may take a while to get going).

Do you want to be informed if our opinion changes on Briggs & Stratton, Edwards Lifesciences, Hansen Natural Resources? The best way to do so is to subscribe to our newsletter. It’s free, and you’ll soon find it’s an invaluable resource when it comes to turning trends and ideas into real money.

We got some really good action Hansen Natural Corporation (HANS) today… the kind of action that hints a major breakout effort could be brewing. The high of $36.47 is the second highest high since last April (shares peaked at $37.93 last June), and this peak immediately followed what could have been - or maybe should have been - the beginning of a deep selloff. Volume is picking up too.

I’ve included two charts below… a near-term one to highlight the ‘almost’ eclipse of new highs. The other one is a longer-term chart that really puts the opportunity in perspective.

The short-term one looks a little bullish head-and-shoulderish, and it details the pattern of higher highs and higher lows that started to take shape in October.

The longer-term one highlights how the October reversal was a major shift in momentum. Yet, we can still see HANS shares have tons of room to recover before a headwind is met.

By the way, Hansen launched a new product last week, called “Elixir’. It’s for women. The company describes it as (and this is 100% serious)….

“For women seeking to add more guilt-free indulgence & simple alternatives into their daily beauty routine, Hansen Beverage Company, a leading marketer of natural and alternative beverages, introduces SELF Beauty Elixir. Made with the finest ingredients, SELF Beauty Elixir is a low-calorie, functional, ready-to-drink beauty beverage infused with an essential blend of vitamins, minerals, natural fruit & botanical extracts with antioxidants that promote and support healthy skin & overall wellness.”

Sounds like it preys a little on feelings of self-doubt, to the point of being preachy…which is exactly why it should do well.

There are no figures or projections about how much they expect Elixir to contribute to the top or bottom line. We don’t foresee it having  a huge impact (either way) anytime soon, though you never know.

To stay in touch with our ongoing coverage of Hansen Natural Resources (NASDAQ:HANS), and how you can best trade it, sign up for our free newsletter today.

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2/27/2009

Hansen Natural Corporation (HANS) Tops Operating Earnings Estimate

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• HANS

— SmallCapNetwork Editor @ 9:29 am

As we discussed earlier this week, Hansen Natural Corporation’s (HANS) earnings came out yesterday, and today the stock is responding. That’s good news for us; despite the net loss, operating profits were good, and shares are up pretty nicely right now (about 9%). Of course, that only offsets yesterday’s dip, but at least we’re back to break even levels.

In short, a one-time charge for changing distributors cost the company $118.2 million, leading to a $23.4 million loss (a per-share loss of 25 cents) for the quarter. Had it not been for the charges, Hansen would have earned $79 million, or about 74 cents per share. That’s leaps and bounds above analyst’s expectations of 42 cents’ worth of per-share operating profit. It also tops last year’s Q4 income of 45 cents. Thus, we’re seeing some strength today.

All told, I hate the loss, but think about the fact that it’s a one-time charge. The company’s Q4 bottom line surged by 64% when taking the one-time hit out of the equation.

Anyway, Hansen is back above a significant short-term support line, though I don’t think we’re out of the woods yet. HANS also peeled back from it’s highs pretty quickly today, and still hasn’t made any major progress in the bigger picture. A move above $35.80 would be impressive to me.

I still like this trade though… a lot. The company continues to grow the top and bottom line, and I think next quarter is going to be another winner, this time without the big charges.

The best way to keep tabs on Hansen Natural Corporation (NASDAQ: HANS), and our thoughts about trading it, is by subscribing to our newsletter. Sign up today.

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2/23/2009

Hansen Natural Corporation (HANS) Sets Earnings Date for Later This Week

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• HANS

— SmallCapNetwork Editor @ 4:26 pm

Geez, all they did was tell the market when they’d be announcing fourth quarter and full year earnings. Yet, Hansen Natural Corporation (HANS) plunged 5.5% today, moving under a couple of key support levels. Not a good omen, and not good for our trade, huh?

Actually, it’s doubtful the announcement or earnings expectations had anything to do with the dip. We attribute about 99% of the selloff in HANS to the market’s action. Unfortunately, fair or not, if the market’s illness infects HANS, then this stock is still apt to sink. It’s a sobering reminder of investing rule #1…. get the market’s direction right first, and think carefully about trying to trade against the grain.

Anyway, we’re optimistic about Hansen’s upcoming results. As we wrote in our original profile issued on February 6th…

In their last reported quarter (ending on September 30th) Hansen managed to improve earnings by 14.5%. Operating margins weigh in at 25.9% over the course of the last year, and net margins were 17.2% for the last twelve months. That’s among the best for any company in most any industry during that time. In terms of valuation, a P/E of 19.3 isn’t dirt cheap, but is reasonable given the company’s growth prospects; the forward-looking P/E (twelve month) is only 13.4….For the last year, the ROE is 39.9%, and the ROA is 28.9%.

One thing we didn’t look at in detail at the time were the specific projections for Q4 earnings, and by default, full-year earnings. Here’s a quick look at that data…

As of right now, the average analyst is looking for Q4 earnings of 42 cents. Adding that estimate to the $1.34 earned so far this year, the full year total earnings should come in at $1.76.

It’s worth mentioning that analysts have been off - by too much as well as not enough - for the four prior quarters. So, don’t be shocked if Hansen reports something besides 42 cents. It’s also worth mentioning that the company earned 51 cents and 54 cents in the last two quarters (respectively). and earned 45 cents in Q4 of 2007. So, the bar is actually set pretty low here. If Hansen still falls short, it could be a problem.

So do we dump it before we have to find out something the hard way? No.

The company has been doing well despite several challenges, and we have to wonder if the marketwide weakness is doing us a favor in front of the earnings news by setting the stock up for a rebound. The risk/reward scenario - we think, anyway - still favors holding onto these shares. The $30.30 area is a big line in the sand for us.

Anyway, we’ll know the good or bad news after the market closes on Thursday, the 26th. Here’s the webcast information from the press release:

Hansen Natural Corporation (NasdaqGS:HANS) announced today that results for its fourth quarter and full year ended December 31, 2008 will be released on Thursday, February 26, 2009 after the close of the market. The company also said that chairman and chief executive officer Rodney Sacks and vice chairman and president Hilton Schlosberg will host an investor conference call that same day at 2:00 p.m. Pacific Time to review the company’s financial results and operations.

The call will be open to all interested investors through a live audio Web broadcast via the Internet at http://www.hansens.com and http://www.opencompany.info. For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on both Websites.

Do you want to get our immediate thoughts on Hansen’s (NASDAQ: HANS) numbers and our trade in the aftermath of the announcement? Be sure to sign up for our newsletter today. Just use the form at the top of this page.

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