Hillshire Brands Enters Oversold Territory

Apr 10 2014, 3:27pm CDT | by

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Hillshire Brands Co (NYSE: HSH) presently has an above average rank, in the top 50% of the coverage universe, which suggests it is among the top most “interesting” ideas that merit further research by investors.

But making Hillshire Brands Co an even more interesting and timely stock to look at, is the fact that in trading on Thursday, shares of HSH entered into oversold territory, changing hands as low as $35.18 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

Click here to find out what 9 other oversold dividend stocks you need to know about, at DividendChannel.com »

In the case of Hillshire Brands Co, the RSI reading has hit 28.5 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 51.1. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, HSH’s recent annualized dividend of 0.70/share (currently paid in quarterly installments) works out to an annual yield of 1.97% based upon the recent $35.70 share price.

A bullish investor could look at HSH’s 28.5 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on HSH is its dividend history.

In general, dividends are not always predictable; but, looking at the history chart below can help in judging whether the most recent dividend is likely to continue.


Special Offer: Find out how Dave Moenning is trading around the most recent insider transactions with a free 30 day trial and a special 20% off coupon from Forbes.

According to the ETF Finder at ETFChannel.com, HSH makes up 2.53% of the PowerShares Dynamic Food & Beverage Portfolio ETF (AMEX: PBJ) which is trading lower by about 1.5% on the day Thursday.

/>/>
 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Need for Speed Reboot is Coming This Fall
Need for Speed Reboot is Coming This Fall
EA will release a complete new Need for Speed this fall. The video game giant just released a teaser video and the first Need for Speed Gameplay video will be revealed in June.
 
 
Google Self-Driving Cars to Hit Public Roads this Summer
Google Self-Driving Cars to Hit Public Roads this Summer
Google announced today that Google Car prototype vehicles will leave the test track and hit the familiar roads of Mountain View.
 
 
Google Search Analytics Launched in Web Master Tools
Google Search Analytics Launched in Web Master Tools
Google officially announced the new Search Analytics feature in Webmaster tools.
 
 
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
T-Mobile Hits Verizon with new 'Never Settle Trial' Campaign
In case customers don't feel satisfied, T-Mobile will pay for them to shift back to Verizon