Trade-Ideas LLC identified

Nu Skin

(

NUS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nu Skin as such a stock due to the following factors:

  • NUS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.5 million.
  • NUS has traded 938,737 shares today.
  • NUS traded in a range 216.6% of the normal price range with a price range of $4.19.
  • NUS traded below its daily resistance level (quality: 526 days, meaning that the stock is crossing a resistance level set by the last 526 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on NUS:

Nu Skin Enterprises, Inc. develops and distributes anti-aging personal care products and nutritional supplements under the Nu Skin and Pharmanex brands worldwide. The stock currently has a dividend yield of 3.5%. NUS has a PE ratio of 17. Currently there is 1 analyst that rates Nu Skin a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Nu Skin has been 1.2 million shares per day over the past 30 days. Nu Skin has a market cap of $2.3 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.60 and a short float of 13.2% with 4.50 days to cover. Shares are down 10.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Nu Skin as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • NUS's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • The gross profit margin for NU SKIN ENTERPRISES is currently very high, coming in at 79.90%. Regardless of NUS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NUS's net profit margin of 2.84% is significantly lower than the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Personal Products industry. The net income has significantly decreased by 76.2% when compared to the same quarter one year ago, falling from $68.31 million to $16.27 million.

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