Barbarian At The Gate: Nu Skin (NUS)

Trade-Ideas LLC identified Nu Skin ( NUS) as a "barbarian at the gate" (strong stocks crossing above resistance 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 $33.9 million.
  • NUS has traded 156,720 shares today.
  • NUS traded in a range 519.3% of the normal price range with a price range of $4.67.
  • NUS traded above its daily resistance level (quality: 461 days, meaning that the stock is crossing a resistance level set by the last 461 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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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 category brands worldwide. The stock currently has a dividend yield of 2.7%. NUS has a PE ratio of 31. Currently there is 1 analyst that rates Nu Skin a buy, 2 analysts rate it a sell, and 2 rate it a hold.

The average volume for Nu Skin has been 695,400 shares per day over the past 30 days. Nu Skin has a market cap of $2.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.44 and a short float of 12.9% with 10.69 days to cover. Shares are up 40.9% 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 solid stock price performance, 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, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, NUS's share price has jumped by 31.98%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that NUS's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for NU SKIN ENTERPRISES is currently very high, coming in at 81.02%. 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 0.70% is significantly lower than the industry average.
  • 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 90.9% when compared to the same quarter one year ago, falling from $36.28 million to $3.32 million.
  • Net operating cash flow has significantly decreased to -$2.72 million or 103.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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