Institutions have jumped on the bandwagon of this wellness/skincare company, purchasing almost 1.6 million shares, and increasing their holdings by more than 40% in recent months. For its most recent quarter, the company’s revenue increased 154% year-over-year to $80.8 million; its net income was a record $14.5 million or $1.18 per diluted share; and it repurchased $5.0 million of common stock during the quarter.
Natural Health Trends Corp. (NHTC)
from Ford Equity Research Report
Natural Health Trends Corp. (NHTC) is a direct-selling and e-commerce company. The company provides a line of NHT Global branded products in three categories including wellness, skincare and lifestyle.
The NHT Global Essentials is the company’s wellness and nutritional supplementation product line. The NHT Global Beauty is the company’s skincare product line. The NHT Global Lifestyle is the company’s lifestyle product line. The company’s products include Premium Noni Juice™, Triotein™, Cluster X2™, Trifusion Max™, LivaPro, Cordyceps Mycelia CS-4, Skindulgence™, Time Restore™, BioCell™, 24K Renaissance Skin Rejuvenation Serum™, Soothe™, Alura™, Valura™, and La Vie™, among others.
We project that NHTC will strongly outperform the market over the next 6 to 12 months. The company has enjoyed a very positive trend in earnings per share over the past 5 quarters. Because the company lacks sufficient analyst estimate data, we place greater weight on the historical EPS trend as the measure of earnings strength. Based on operating earnings yield, the company is undervalued when compared to all of the companies we cover. Share price changes over the past year indicates that NHTC will perform very well over the near term.
Earnings Strength is VERY POSITIVE. While Natural Health Trends Corp.'s earnings have increased from $1.62 to an estimated $3.91 over the past 5 quarters, they have shown strong acceleration in quarterly growth rates when adjusted for the volatility of earnings.
Estimate data for Natural Health Trends Corp. is not available. However, the lack of analyst forecast changes and a comparison of reported versus expected earnings does not inhibit our ability to assess NHTC’s earnings strength. As a matter of fact, our research has shown that our earnings momentum measure is a strong indicator of stock price performance in companies with little or no analyst coverage.
Relative Valuation is VERY POSITIVE. Natural Health Trends Corp.'s operating earnings yield of 7.9% ranks above 85% of the other companies in the Ford universe of stocks, indicating that it is undervalued.
Price Movement is VERY POSITIVE. Natural Health Trends Corp.'s stock price is up 395.1% in the last 12 months, up 62.6% in the past quarter and up 50.7% in the past month. This historical performance should lead to above average price performance in the next one to three months.
Richard Segarra, CFA, Ford Equity Research Report, www.fordequity.com, 800-842-0207, October 30, 2015