Upside Comes Naturally to Natural Health Trends (NHTC) Stock

The long-term chart looks amazing, and we would consider starting a position here.
By Bruce Kamich ,

NEW YORK (TheStreet) -- Doing what comes naturally can apply to the chart of Natural Health Trends (NHTC) - Get Report .

This chart, above, of NHTC is interesting on a couple fronts. First notice the significant pick up in volume since March when prices rallied above the 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line begins climbing in April. Prices pull back in July and August to touch the rising, 200-day moving average -- one of Joseph Granville's eight rules for the 200-day moving average. Prices spring up from the 200-day average, and the Moving Average Convergence Divergence (MACD) oscillator crosses above the zero line by the end of September.

This longer-term chart, above, is pretty amazing. We see two big rallies followed by 50% retracements, with prices surging higher after each correction. The OBV line is rising on this time frame, and the MACD oscillator is in a bullish position. NHTC looks like it is heading still higher and could be considered extended or overbought. Sometimes overbought stocks stay overbought and keep moving higher despite these technical signals. NHTC could be one of those stocks, so traders should consider buying a starter position here in case we don't get a pullback to buy. Don't forget an appropriate sell stop.

Separately, TheStreet Ratings team rates NATURAL HEALTH TRENDS CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate NATURAL HEALTH TRENDS CORP (NHTC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NHTC's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 103.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NHTC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NHTC has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Personal Products industry and the overall market, NATURAL HEALTH TRENDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 425.10% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NHTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NATURAL HEALTH TRENDS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, NATURAL HEALTH TRENDS CORP increased its bottom line by earning $1.62 versus $0.37 in the prior year.
  • You can view the full analysis from the report here: NHTC
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