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The stakes are high for U.S. retailers, which can earn more than a third of their annual sales in the holiday season. Investors hope holiday sales will help retail stocks cap a strong year. The Standard & Poor's retail index is up almost 27 percent this year, compared with a 10.6 percent increase for the broader S&P 500.

The consumer goods sector has been the top performing group in one week performance, with a 4.1% gain during that period.

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Based on these observations I screened for companies in the consumer goods sector where at least one insider made a buy transaction during the month of November. Here is a look at five stocks that I found.

1. LeapFrog Enterprises (NYSE:LF) is the leader in educational entertainment for children. LeapFrog's award-winning product portfolio helps millions of children achieve their potential by delivering best-in-class curriculum through engaging content, fun multimedia learning platforms and toys. The Learning Path, LeapFrog's proprietary online destination for parents and extended family, provides personalized feedback on a child's learning progress and offers recommendations to enhance each child's learning experience. Through the power of play, LeapFrog's products and curriculum help children of all ages prepare for school and life success. LeapFrog's products are available in more than 45 countries and have been used by teachers in more than 100,000 U.S. classrooms. LeapFrog is based in Emeryville, California, and was founded in 1995 by a father who revolutionized technology-based learning solutions to help his child learn how to read.

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Insider buys

  • Gregory Ahearn purchased 6,570 shares on November 19. Gregory Ahearn has served as the company's Chief Marketing Officer since June 2012 and is responsible for the LeapFrog brand and consumer experience globally, which includes consumer insights, product marketing, licensing, content development, marketing communications and public relations.
  • Stanton McKee purchased 25,000 shares on November 16 and currently holds 33,721 shares of the company. Stanton McKee was appointed to the company's board of directors in November 2003.
  • John Barbour purchased 15,000 shares on November 15 and currently holds 177,580 shares of the company. John Barbour has served as the company's Chief Executive Officer and as a board member since March 2011.
  • Raymond Arthur purchased 12,607 shares on November 12-14 and currently holds 22,607 shares of the company. Raymond Arthur has served as the company's Chief Financial Officer since July 2012.
  • Randall Rissman purchased 50,000 shares on November 8-9 and currently holds 440,016 shares of the company. Randall Rissman was appointed to the company's board of directors in August 2011.

Financials

The company reported the third-quarter financial results on November 5 with the following highlights:

Revenue$193.1 million
Net income$41.7 million
Cash$49.4 million

Outlook

For the full year 2012, the company expects:

  • Net sales to be between $535 million and $550 million, an increase of $80 million to $95 million, or 18% to 21%, compared to $455 million in 2011.
  • Net income per diluted share to be in the range of $0.75 to $0.81 compared to $0.30 in 2011.

Competition

The company's competitors include Hasbro (NASDAQ:HAS) and Mattel (NASDAQ:MAT). Here is a table comparing these companies.

CompanyLFHASMATIndustry
Market Cap:562.75M4.84B12.42B537.05M
Employees:4945,90028,000865.00
Qtrly Rev Growth (yoy):0.28-0.020.04-0.12
Revenue [ttm]:546.77M4.13B6.32B674.33M
Gross Margin :0.420.490.530.42
EBITDA :68.44M731.77M1.35B68.44M
Operating Margin :0.100.140.190.19
Net Income :56.98M344.83M831.71MN/A
EPS :0.832.622.410.83
P/E :10.0814.2415.0114.29
PEG (5 yr expected):0.491.771.581.29
P/S :1.031.171.970.98

LeapFrog is currently trading below the industry average P/E multiple.

My analysis

The stock has a $5 price target from the Point and Figure chart. There have been six insider buy transactions and there have not been any insider sell transactions during the month of November. There are three analyst buy ratings, four neutral ratings and 0 sell ratings with a average target price of $11.50. The stock is trading at a P/E ratio of 10.02 and a forward P/E ratio of 9.67. The company has a book value of $3.92 per share. I have a neutral bias for the stock currently.

2. The Hain Celestial Group (NASDAQ:HAIN) is a leading natural and organic products company in North America and Europe. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings, Earth's Best, Terra, Garden of Eatin', Sensible Portions, Health Valley, Arrowhead Mills, MaraNatha, SunSpire, DeBoles, Gluten Free Cafe, Hain Pure Foods, Hollywood, Spectrum Naturals, Spectrum Essentials, Walnut Acres Organic, Imagine, Almond Dream, Rice Dream, Soy Dream, WestSoy, The Greek Gods, Ethnic Gourmet, Yves Veggie Cuisine, Europe's Best, Cully & Sully, New Covent Garden Soup Co., Johnson's Juice Co., Farmhouse Fare, Linda McCartney, Lima, Danival, GG UniqueFiber, Grains Noirs, Natumi, JASON, Zia Natural Skincare, Avalon Organics, Alba Botanica, Queen Helene and Earth's Best TenderCare. Hain Celestial has been providing A Healthy Way of Life since 1993.

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Insider buys

Carl Icahn purchased 75,000 shares on November 14 and 34,400 shares on November 6-7. Carl Icahn currently controls 7,239,963 shares of the company. Hain Celestial has 46,088,339 shares outstanding which makes Carl Icahn a 15.7% owner of Hain Celestial.

Financials

The company reported the first quarter fiscal year 2013, which ended September 30, financial results on November 1 with the following highlights:

Revenue$359.8 million
Net income$16.4 million
Cash$36.2 million
Debt$360.2 million

Outlook

The company provided the following guidance for its fiscal year 2013.

  • Total net sales range of $1.780 billion to $1.795 billion.
  • Earnings of $2.35 to $2.45 per diluted share.

Competition

The company's competitors include General Mills (NYSE:GIS), Mondelez International (NASDAQ:MDLZ) and Nestle (OTCPK:NSRGY). Here is a table comparing these companies.

CompanyHAINGISMDLZNSRGYIndustry
Market Cap:2.84B26.02B44.94B200.25B640.10M
Employees:3,72035,000126,000328,0001.82K
Qtrly Rev Growth (yoy):0.250.05-0.020.080.11
Revenue :1.45B16.86B53.98B93.06B1.27B
Gross Margin :0.270.370.350.470.30
EBITDA :184.62M3.37B9.00B17.32B116.31M
Operating Margin :0.110.170.140.160.08
Net Income :101.36M1.71B3.32B10.61BN/A
EPS :1.812.561.873.320.94
P/E :34.1315.7513.5218.9619.39
PEG (5 yr expected):1.532.051.493.281.63
P/S :1.971.550.842.150.84

Hain Celestial is growing faster than the industry in average.

My analysis

The stock has a $47 price target from the Point and Figure chart. There have been two insider buy transactions and there have not been any insider sell transactions during the month of November. There are four analyst buy ratings, three neutral ratings and 0 sell ratings with a average target price of $60.33. The stock is trading at a P/E ratio of 28.31 and a forward P/E ratio of 21.75. I have a cautiously bullish bias for the stock currently.

3. Vector Group (NYSE:VGR) through its subsidiaries, Liggett Group LLC and Vector Tobacco Inc., manufactures and markets high quality cigarette products to adult smokers in the United States. Vector Group also owns New Valley LLC.

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Insider buys

Phillip Frost purchased 20,000 shares on November 16 by Frost Gamma Investments Trust. Phillip Frost currently controls 12,180,007 shares of Vector Group. Vector Group has 87,003,808 shares outstanding which makes Phillip Frost a 14% owner of Vector Group. Phillip Frost's net worth was $2.4 billion as of September 2012.

Financials

The company reported the third-quarter financial results on October 31 with the following highlights:

Revenue$272.8 million
Net income$17.9 million
Cash$282.5 million
Debt$515.0 million

Vector Group announced on November 20 the closing of its registered public offering of $230.0 million aggregate principal amount of its Variable Interest Convertible Senior Notes due in 2019.

Competition

Vector Group's competitors include Lorillard (NYSE:LO) and Reynolds American (NYSE:RAI). Here is a table comparing these companies.

CompanyVGRLORAIIndustry
Market Cap:1.38B15.50B23.65B23.47B
Employees:5592,8005,4005.40K
Qtrly Rev Growth (yoy):-0.010.05-0.040.06
Revenue :579.60M4.55B8.31B8.31B
Gross Margin :0.440.520.480.52
EBITDA :165.00M2.07B2.93B2.93B
Operating Margin :0.270.450.340.38
Net Income :21.49M1.10B1.44BN/A
EPS :0.168.352.502.50
P/E :97.9014.3316.9417.37
PEG (5 yr expected):N/A1.632.071.65
P/S :2.383.402.853.79

Vector Group is currently trading below the industry average P/S ratio.

My analysis

The stock has a $11.5 price target from the Point and Figure chart. There has been one insider buy transaction and there have not been any insider sell transactions during the month of November. The stock is trading at a forward P/E ratio of 63.44 and has a 9.61% dividend yield. I have a neutral bias for the stock currently.

4. Spectrum Brands (NYSE:SPB) is a global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac, Remington, Varta, Tetra, Marineland, Nature's Miracle, Dingo, 8-In-1, Spectracide, Cutter, Repel, and HotShot. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Madison, Wisconsin, Spectrum Brands generates annual revenue from continuing operations in excess of $3 billion.

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Insider buys

Harbinger Group purchased 18,000 shares during November, 1,800 shares during October, 750,000 shares during March, 646,900 shares during February and 253,400 shares during January. Harbinger Group currently holds 29,557,608 shares of Spectrum Brands. Spectrum Brands has 53.1 million shares outstanding which makes Harbinger Group a 55.7% owner of Spectrum Brands.

Financials

The company reported the full fiscal year 2012, which ended September 30, financial results on November 14 with the following highlights:

Revenue$3.25 billion
Net income$48.6 million
Cash$158.0 million
Debt$1.67 billion

Outlook

Spectrum Brands expects fiscal 2013 net sales to increase at or above the rate of GDP, with adjusted EBITDA expected to grow at a higher percentage rate than net sales. The company anticipates free cash flow of at least $200 million in fiscal 2013.

The company remains on track to complete its acquisition of the Hardware & Home Improvement Group of Stanley Black & Decker by the end of 2012. Accordingly, Spectrum Brands expects to update its outlook when it reports fiscal 2013 first quarter results in early February 2013.

Competition

Spectrum Brands' competitors include Energizer Holdings (NYSE:ENR) and Procter & Gamble (NYSE:PG). Here is a table comparing these companies.

CompanySPBENRPGIndustry
Market Cap:2.33B4.96B186.75B568.25M
Employees:5,90015,000129,0004.22K
Qtrly Rev Growth (yoy):0.080.060.020.30
Revenue :3.23B4.73B85.37B457.03M
Gross Margin :0.350.460.490.25
EBITDA :433.76M897.50M19.16B80.89M
Operating Margin :0.110.150.190.05
Net Income :-20.27M333.40M9.41BN/A
EPS :-0.394.903.261.19
P/E :N/A15.7220.9417.45
PEG (5 yr expected):1.291.062.211.29
P/S :0.721.092.250.62

Spectrum Brands' P/S ratio is in line with the industry average.

My analysis

The stock has a $58 price target from the Point and Figure chart. There have been three insider buy transactions and there have not been any insider sell transactions during the month of November. There are two analyst buy ratings, three neutral ratings and 0 sell ratings with a average target price of $39.00. The stock is trading at a P/E ratio of 265.82. I have a cautiously bullish bias for the stock currently.

5. Summer Infant (NASDAQ:SUMR) is a designer, marketer and distributor of branded durable juvenile health, safety and wellness products (for ages 0-3 years), which are sold principally to large U.S. retailers. The company currently sells proprietary products in a number of different categories, including nursery audio/video monitors, safety gates, durable bath products, bed rails, nursery products, booster and potty seats, infant bedding, bouncers, travel accessories, highchairs, swings and nursery furniture.

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Insider buys

  • Dan Almagor purchased 64,493 shares on November 16 and currently holds 78,957 shares of the company. Dan Almagor serves as a director of the company.
  • Richard Wenz purchased 41,100 shares on November 16-19 and currently holds 63,564 shares of the company. Richard Wenz serves as a director of the company.
  • Robert Stebenne purchased 37,692 shares on November 16 and currently holds 60,156 shares of the company. Robert Stebenne serves as a director of the company.

Financials

The company reported the third-quarter financial results on November 13 with the following highlights:

Revenue$64.0 million
Net loss$65.4 million
Cash$11.9 million
Debt$76.5 million

The company reported a net loss of $65.4 million, or $3.65 per share, in the third quarter of 2012, which includes a goodwill and intangible impairment charge of $70.2 million, compared with net income of $2.1 million, or $0.11 per diluted share, in the third quarter of 2011.

Outlook

Jason Macari, Chairman and Chief Executive Officer of Summer Infant, commented on November 13:

"Looking ahead, we expect improved bottom-line results in the fourth quarter and into 2013 as we realize savings from our cost-reduction initiatives, including our efforts to control promotional and advertising dollars. We continue to believe in the key strategic drivers of our business, which include innovation, global expansion, brand building and operational excellence. We made good progress in each of these areas in the third quarter and expect to build on that foundation as we grow a more profitable business."

Competition

Summer Infant's competitors include Dorel Industries (OTCPK:DIIBF) and Mattel. Here is a table comparing these companies.

CompanySUMRDIIBFMATIndustry
Market Cap:30.29M1.17B12.38B954.00M
Employees:2475,00028,0001.98K
Qtrly Rev Growth (yoy):0.010.070.040.11
Revenue :244.08M2.43B6.32B1.15B
Gross Margin :0.330.230.530.45
EBITDA :11.09M179.75M1.35B167.81M
Operating Margin :0.020.060.190.10
Net Income :-64.88M106.86M831.71MN/A
EPS :-3.793.332.410.98
P/E :N/A11.1014.9723.53
PEG (5 yr expected):0.43N/A1.581.58
P/S :0.120.491.972.16

Summer Infant is currently trading below the industry average P/S ratio.

My analysis

The stock has met its bearish $2.5 price target from the Point and Figure chart. There have been three insider buy transactions and there have not been any insider sell transactions during the month of November. There are 0 analyst buy ratings, two neutral ratings and 0 sell ratings with a average target price of $8.00. The stock is trading at a forward P/E ratio of 5.50. The company has a book value of $1.71 per share. I have a cautiously bullish bias for the stock currently.

Source: 5 Consumer Goods Companies With Recent Insider Buying