Strong On High Volume: Natural Health Trends (NHTC)

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.

Trade-Ideas LLC identified Natural Health Trends ( NHTC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Natural Health Trends as such a stock due to the following factors:

  • NHTC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.8 million.
  • NHTC has traded 131,744 shares today.
  • NHTC is trading at 4.81 times the normal volume for the stock at this time of day.
  • NHTC is trading at a new high 3.24% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 NHTC:

Natural Health Trends Corp., a direct-selling and e-commerce company, provides wellness, beauty, and lifestyle products for consumers or business builders under the NHT Global brand name. The company manufactures and supplies its products through third parties. The stock currently has a dividend yield of 0.4%. NHTC has a PE ratio of 23.

The average volume for Natural Health Trends has been 253,400 shares per day over the past 30 days. Natural Health Trends has a market cap of $391.8 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.34 and a short float of 2.2% with 0.39 days to cover. Shares are up 193.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Natural Health Trends as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • NHTC's very impressive revenue growth greatly exceeded the industry average of 3.9%. Since the same quarter one year prior, revenues leaped by 85.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NHTC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NHTC has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Personal Products industry and the overall market, NATURAL HEALTH TRENDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for NATURAL HEALTH TRENDS CORP is currently very high, coming in at 78.92%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.38% is above that of the industry average.
  • Net operating cash flow has significantly increased by 73.56% to $9.69 million when compared to the same quarter last year. In addition, NATURAL HEALTH TRENDS CORP has also vastly surpassed the industry average cash flow growth rate of 18.09%.

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