Nu Skin Enterprises, Inc. (NYSE:NUS)

CAPS Rating: 2 out of 5

A global direct selling company with operations throughout Asia, the Americas and Europe. The Company develops and distributes personal care products and nutritional supplements sold under the Nu Skin and Pharmanex brands.

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Player Avatar bajapa (< 20) Submitted: 11/16/2012 5:56:19 AM : Outperform Start Price: $42.55 NUS Score: -29.11

NUS has an outstanding track record of stable and continuous growth in the last 5 years. Sales, profit margins and several balance sheet ratios have improved every year. Only negative issue is their share buy back program. I personally favor receiving dividend instead. The accusations in the Citron Research Report seems highly exaggerated in order to benefit from short selling the stock. I have seen no other signs or evidence that the company has a problem with the Chinese government. The management has earned a huge credit by their past performance, and they have a good strategy in place to enhance sales in mainland China which are still making only 11% of the total sales of NUS at the moment. With an expected EPS of USD 3.45 for 2012 the stock is trading at 12.8 times earnings. Considering a conservatively estimated EPS growth of 15% per year for the coming 5 years (last 5 years EPS growth was 39% per year), and the stable growth pattern that is likely to continue I expect that the PE will eventually rise to 18 to reflect the real growth potential, making the stock climb to over USD 100 in 4 to 5 years from now.

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