Nu Skin (NUS) Showing Signs Of A Dead Cat Bounce Today

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.

Trade-Ideas LLC identified Nu Skin ( NUS) as a "dead cat bounce" (down big yesterday but up big today) 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 $89.1 million.
  • NUS has traded 148,569 shares today.
  • NUS is up 4.9% today.
  • NUS was down 5.1% yesterday.

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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. The stock currently has a dividend yield of 3.1%. NUS has a PE ratio of 8.9. Currently there are 2 analysts that rate Nu Skin a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Nu Skin has been 1.3 million shares per day over the past 30 days. Nu Skin has a market cap of $2.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.36 and a short float of 4.5% with 1.58 days to cover. Shares are down 67.7% 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 buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The gross profit margin for NU SKIN ENTERPRISES is currently very high, coming in at 85.65%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.00% trails the industry average.
  • Although NUS's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. Despite the fact that NUS's debt-to-equity ratio is low, the quick ratio, which is currently 0.53, displays a potential problem in covering short-term cash needs.
  • NUS, with its decline in revenue, underperformed when compared the industry average of 8.6%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Personal Products industry and the overall market, NU SKIN ENTERPRISES's return on equity significantly exceeds that of both the industry average and the S&P 500.

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