Why Nu Skin Enterprises (NUS) Is Surging Today (Update)

Update (5 p.m.): Updated with Monday market close information.

NEW YORK (TheStreet) -- Nu Skin Enterprises  (NUS) rose 18.21% to $88.66, up $13.66 from its previous close of $75, on Monday after Chinese regulators issued a smaller-than-expected fine to the personal care product and dietary supplement company. 

Nu Skin received a $540,000 fine for illegal product sales and misleading local customers, according to Reuters. China's State Administration for Industry & Commerce (SAIC) said in a statement on its website that the company sold items outside the allowed range and exaggerated the possible results of using some of its products. The SAIC also noted some Nu Skin employees made unsanctioned sales and misled consumers.

Six individual employees will also face fines totaling $241,000.

The stock hit a high of $97.49 and a low of $86.26 for the day; it holds a one-year high of $140.50 and a one-year low of $42.03. More than 10.65 million shares changed hands on Monday, well above the average volume of 2,815,130.

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TheStreet Ratings team rates NU SKIN ENTERPRISES as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate NU SKIN ENTERPRISES (NUS) 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 robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • NUS's very impressive revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues leaped by 79.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 108.24% and other important driving factors, this stock has surged by 80.21% 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, NUS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NU SKIN ENTERPRISES 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. We feel that this trend should continue. During the past fiscal year, NU SKIN ENTERPRISES increased its bottom line by earning $5.94 versus $3.52 in the prior year. This year, the market expects an improvement in earnings ($6.40 versus $5.94).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Personal Products industry. The net income increased by 111.5% when compared to the same quarter one year prior, rising from $59.23 million to $125.27 million.
  • 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 Personal Products industry and the overall market, NU SKIN ENTERPRISES's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: NUS Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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