Cramer Says Hansen Natural (HANS) is Done For... Is This a Buy Signal?

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HANS Hot Sheet

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Shares of Hansen Natural (Nasdaq: HANS) are trading about 3 percent lower on the session following a call by Jim Cramer on Thursday evening's Mad Money.

Cramer and friends took a look at Hansen's chart and evaluated both bullish and bearish technical signs which Hansen has been showing recently:

on the bullish side of things, Ed Ponsi noted Hansen bounced off its 100-day moving average;
John Roque called it a "pretty girl" name which is showing signs of slowing. Nice call, John.
Dan Fitzpatrick saw four breaks for Hansen below it's 52-day moving average, which all came on high volume. Fitzpatrick said this indicates large selling by institutions, generally a bearish sign when it happens.
Tim Collins also said there were some red flags Hansens momentum might be slowing.

Hansen makes a variety of energy drinks and sodas that dominate their niche market as well, and it's being rewarded with an upward trend in the stock price, noted Cramer.

But, with shares going for 24x earnings, and a 14.5 percent growth rate, he thinks shares will get slaughtered should the stock ever tumble. He backs up the claim by noting compressing operating margins last quarter, and the U.S. market showing signs of leveling off.

Cramer noted there is opportunity for international growth, but that comes at a price.

It's at this point we'd like to point out a piece back in August when Cramer reassured investors about SodaStream (Nasdaq: SODA). Shares are down about 10 percent since then. Or Netflix, when Cramer suggested to buy Netflix (Nasdaq: NFLX) following its earnings sell-off. Netlifx stock is down about 70 percent since then.

The best point Cramer and friends make is to watch the volume on Hansen should a large move emerge, but that generally holds for most stocks. As for margins compressing, many speculate input prices could drop next year, and Hansen maintains a policy to source from the best supplier, offering the best price.

Others might note similar moves made in shares of Apple (Nasdaq: AAPL) when it was just beginning to accelerate. Heck, in August/September in 2010 you might've still be able to catch a ride, and sell when things "leveled off" to $325, missing another 30 percent gain. Shares of Apple are still 23 percent above the $325 level, even though a little momentum has slowed.

The best idea is to do some homework, look at demand and financials, and determine whether or not you think Hansen will continue. Looking back, you could've sold out of your position easily at $80, $85, or $90 on the pullbacks, but value will trump large swings almost every time.

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