What Happened?
A number of stocks fell in the afternoon session after markets gave up early gains with optimism over progress in US-China trade talks quickly fading as the Trump administration announced plans to raise tariffs on all Chinese imports to well above 100%.
Hopes had been lifted by chatter of constructive negotiations aimed at easing and eventually removing U.S. trade tariffs. But the news confirmed fears of a prolonged trade fight, increasing uncertainty about the direction of economic policy. This left investors grappling with the dual threat of slower growth and higher inflation, both of which could linger if the standoff continues.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Shelf-Stable Food company Hain Celestial (NASDAQ: HAIN) fell 10.6%. Is now the time to buy Hain Celestial? Access our full analysis report here, it’s free.
- Apparel and Accessories company PVH (NYSE: PVH) fell 7.8%. Is now the time to buy PVH? Access our full analysis report here, it’s free.
- Apparel and Accessories company Carter's (NYSE: CRI) fell 7.7%. Is now the time to buy Carter's? Access our full analysis report here, it’s free.
Zooming In On Hain Celestial (HAIN)
Hain Celestial’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. But moves this big are rare even for Hain Celestial and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 31.3% on the news that the company reported second-quarter 2024 earnings. Hain Celestial blew past analysts' EPS expectations, and its organic revenue growth also outperformed Wall Street's estimates.
Looking ahead, guidance was promising, with FY'25 organic sales expected to be flat (vs. -2% decline recorded in FY'24). Similarly, adjusted EBITDA was expected to grow by mid-single digits, year on year, while free cash flow was expected to be at least $60m. Zooming out, this was a fantastic quarter, which was reflected in the significant stock move.
Hain Celestial is down 43.2% since the beginning of the year, and at $3.41 per share, it is trading 62.5% below its 52-week high of $9.09 from October 2024. Investors who bought $1,000 worth of Hain Celestial’s shares 5 years ago would now be looking at an investment worth $133.73.
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