Thursday, August 18, 2011

NUS - Nu Skin

By Steve Cook
All American Investor

Company Highlights

Nu Skin Enterprises Inc  (NUS) develops, distributes and sells personal care and nutritional supplements under the Nu Skin and Pharmanex brands. The company has earned a 20% return on equity while growing profits and dividends at an 8-9% pace over the last five years, though it is expected to increase to a 14-16% rate over the next five years. Driving profits are:

(1) the introduction of new products tied to its ageLOC technology which claims to slow the skin’s aging process,

(2) geographic expansion in both Europe and Asia,

(3) an aggressive cost control program [margins rose from 12.5% to 13.5%],

The primary negative for NUS is its large international operation exposes it to currency risk.

NUS is rated B++ by Value Line, carries a 21% debt to equity ratio and its stock yields 1.5%. (NUS was purchased by the High Yield Portfolio when its stock yielded 4.7%)

Statistical Summary

Stock Dividend Payout # Increases
Yield Growth Rate Ratio Since 2001

NUS 1.5% 14% 22% 10
Ind Ave 2.1 10 27 NA

Debt/ EPS Down Net Value Line
Equity ROE Since 2001 Margin Rating

NUS 21% 23% 3 16% B++
Ind Ave 67 22 NA 6 NA


Note: NUS stock made great progress off its March 2009 low, quickly surpassing the down trend off its July 2004 (not a misprint) high (red line) and the November 2008 trading high (green line). The stock is in a long term up trend (straight blue lines) as well as an intermediate term up trend (purple lines). The wiggly blue lines are Bollinger Bands. The High Yield Portfolio owns a 50% position in NUS. Additional shares would be Bought at $11; the lower boundary of its Sell Half Range is $46.

Investor Presentation AUGUST 17, 2011

Original content Steve Cook, All American Investor