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NEW YORK (TheStreet) -- GNC Holdings (GNC) - Get Free Report stock closed down 14.24% to $34.50 on heavy trading volume on Thursday after Oregon Attorney General Ellen Rosenblum filed a lawsuit against the company for allegedly selling supplements with illegal ingredients.

The retailer of health and wellness products was charged with selling nutritional and dietary supplements with picamilon, a synthetic chemical that is not approved for use in the U.S.

The lawsuit also alleges that GNC sold products containing the stimulant BMPEA labeled as a dietary supplement, which the FDA has ruled as false and misleading.

"It is scary to know that certain products sold by GNC contain an ingredient that is not even labeled-let alone approved in the U.S.," Rosenblum said in a statement. "There are 25 GNC stores in Oregon that sold thousands of these products over the span of a couple of years."

GNC released a statement, in part saying, "The claims made by the Oregon Attorney General are without merit and GNC intends to vigorously defend against these allegations. In response to FDA statements regarding the regulatory status of BMPEA and picamilon, GNC promptly took action to remove from sale all products containing those ingredients."

The complaint states that the company is accountable, although it is only a retailer, because "GNC works closely with third-part vendors to ensure that labeling and marketing materials comply with GNC's requirements and expectation."

By the end of the trading day, 10.18 million shares of GNC had exchanged hands, compared with its average daily volume of 1.36 million shares.

Separately, TheStreet Ratings team rates GNC HOLDINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate GNC HOLDINGS INC (GNC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, solid stock price performance and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.9%. Since the same quarter one year prior, revenues slightly increased by 0.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, GNC HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has significantly increased by 122.73% to $67.26 million when compared to the same quarter last year. In addition, GNC HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -10.57%.
  • You can view the full analysis from the report here: GNC