Trade-Ideas LLC identified

Nu Skin

(

NUS

) as a weak on high relative volume 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 $55.2 million.
  • NUS has traded 206,930 shares today.
  • NUS is trading at 3.98 times the normal volume for the stock at this time of day.
  • NUS is trading at a new low 3.09% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 4.9%. NUS has a PE ratio of 13. 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 1.1 million shares per day over the past 30 days. Nu Skin has a market cap of $1.7 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.55 and a short float of 20% with 5.89 days to cover. Shares are down 23.1% year-to-date as of the close of trading on Friday.

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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 attractive 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:

  • The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 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 78.78%. 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 6.26% is significantly lower than the industry average.
  • Looking at the price performance of NUS's shares over the past 12 months, there is not much good news to report: the stock is down 43.76%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Personal Products industry average. The net income has decreased by 22.9% when compared to the same quarter one year ago, dropping from $46.51 million to $35.84 million.

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