GNC Holdings (NYSE:GNC)

CAPS Rating: 5 out of 5

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Member Avatar jbsnyder100 (32.11) Submitted: 7/8/2014 3:08:48 AM : Outperform Start Price: $34.11 GNC Score: +23.67

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Member Avatar TSIF (99.96) Submitted: 5/7/2014 7:07:15 PM : Outperform Start Price: $35.04 GNC Score: +14.98

I'm not normally a vitamin, booster, herb, GNC type of guy on the whole.. I threw away full grocery sacks when I cleaned out my parents house, so I understand their following and for some individuals there are indications they can help. The market itself, however is full of competition, but the margins are high. GNC resells many on the providers inventory and dime.

I understand the market's derisking...the question is why they bid some of these stocks up to such high multiples to start with, but GNC missed by a penny on higher top/bottom lines. They did guide downward, but full year estimates of over $3 (a 7 to 9% increase), should have supported the share price at better than a 20% drop to a 52 week (and then some) low. In some equities, the share price was based on a certain percent of forward growth, but it doesn't appear to me the company has missed the estimates. Several downgrades piled on. Besides solid growth, GNC Holdings pays a 1.4% dividend and has an active stock buyback.

A half billion buyback over the last three years on a 3.55B market cap. International expansion. There has been some negative news on supplements which bears watching, but I don't believe the public is essentially jaded with the this is good for you, this is bad for you, constant back and forth.

I do love this quote, however.
"Joe Fortunato, Chairman, President & CEO, said, "January and February were affected by severe weather across large parts of the country, resulting in a delayed start to the workout season."

Yes, blame slow supplement sells on the weather!

Will watch this one for a few quarters, might be a long play if negativity doesn't develop in the arena.
I give this one a Vitamin B+ for now.

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Member Avatar EvanBuck (99.78) Submitted: 4/18/2014 7:07:27 PM : Outperform Start Price: $44.63 GNC Score: -11.84

My pitch on the Motley Fool blogging network: http://www.fool.com/investing/general/2014/04/16/nutritional-supplement-companies-need-to-work-out.aspx

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Member Avatar elcid24 (73.78) Submitted: 3/18/2014 3:57:44 PM : Outperform Start Price: $43.93 GNC Score: -11.55

I know there are some concerns that GNC sells commodity-like products and that e-commerce will eat into margins, but this article helps clarify how GNC is handling the issue, very well:

http://online.barrons.com/article/SB50001424053111903704404579339072072564710.html

At a 16.5 P/E, the company is trading at a discount to the market. The dividend payment is nearly 1.5%. Revenues and earnings are growing at near double-digit clips. EPS are growing even faster. Return on Equity has averaged over 20% over the past several years and is currently over 30%. Returns on Assets have stabilized around 10%.

At the end of the day, GNC is the undisputed king in its industry, and the industry happens to be growing over 5% per year.

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Member Avatar chris293 (85.04) Submitted: 12/2/2013 1:38:11 AM : Outperform Start Price: $59.65 GNC Score: -39.25

This company has a lot of good numbers going for it and double the S%P this year.

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Member Avatar unimattc (< 20) Submitted: 8/7/2013 9:01:55 PM : Outperform Start Price: $51.48 GNC Score: -35.10

No end in sight to US being more health conscious...I mean we need some vitamins to go with our Big Macs and Twinkies!

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Member Avatar TMF1000 (99.71) Submitted: 6/5/2013 11:51:46 AM : Outperform Start Price: $43.21 GNC Score: -23.98

GNC Group (GNC) placed on CAPS 44.10. The PE Ratio was 18.15. Sales growth this last quarter was up only about 6%, but net income per share was up 21%. They pay a $0.60 dividend which gives them a dividend yield of 1.4%. Their cash flow yield is 4.6%, so they could easily raise their dividend. They are by far the leader in a very fragmented industry. I believe both VSI and GNC will do well and I think they may make a fair pairing in a portfolio. Stability versus growth.

They do have $1.1 billion in debt. But they generate about $200 million in cash flow a year and they have $174 million in cash, so that shouldn't be a problem. Their cash flow is very high, so in my opinion, is reason enough to believe they will beat the S&P500 over the next ten years.

February 16, 2012 4Q:2011 Earnings’ highlights:
** 4Q revenue was $509.608 million up from $435.759 million
** Fiscal 2011 revenue was $2.072 billion up from $1.822 billion
** TTM revenue was $2.072 billion or $18.99 per share
** Diluted share count 109.116 million
** 4Q earnings $0.35 up from $0.15
** Fiscal 2011 earnings were $1.24 up from $0.85
** Store count 7,685 including 3046 company owned stores: Same store sales were up 12.1 for domestic company owned stores
** Dividend annual $0.44
** Cash flow for the year was $130.9 million up from $109 million
** TTM cash flow was $130.9 million or $1.27 per share
**Diluted share count 103.01 million
** Trading range between February 16, 2012 and April 25, 2012 was $30.75 to $36.41: PE ratio range was 24.8 to 29.36: PS ratio range was 1.62 to 1.92: Cash flow yield range was 3.5% to 4.13%: Dividend yield range was 1.2% to 1.43%

April 25, 2012 1Q:2012 earnings’ highlights:
** Revenue was $624.272 up from $506.008 million
** TTM Revenue was $2.19 billion or $20.33 per share
** Earnings were $0.59 up from $0.06
** TTM earnings were $1.77 per share
** Diluted share count 107.746 million
** Cash flow for the quarter was $61.5 million up from $56.841 million
** TTM cash flow was $135.6 million or $1.26 per share
** Cash $201.574 million: debt $901.2 million
** Store 7,777: same store sales for domestic company stores up 15.8%
** Gross margins 38.56%: operating margins 17.95%
** Trading range between April 25, 2012 and July 26, 2012 was $33.71 to $42.70: PE ratio range was 19.05 to 24.12: PS ratio range was 1.66 to 2.1: Cash flow yield range was 2.95% to 3.7%

July 26, 2012 2Q:2012 earnings’ highlights:
** Revenue was $619.081 million up from $518.535 million
** TTM revenue was $2.29 billion or $21.22 per share
** Earnings were $0.62 up from $0.34
** TTM earnings were $2.05 per share
** Diluted share count 107.927 million
** Gross margins 38.68%: Operating margins were 18.91%
** Same store sales for domestic company owned stores up 12.9%
**Cash flow for six months was $72 million up from $61.1 million
** TTM cash flow was $141.8 million or $1.31 per share
** Cash $160.167 million: debt $900.1 million
** Trading range between July 26, 2012 and November 1, 2012 was $35.03 to $41.22: PE ratio range was 17.09 to 20.1%: PS ratio range was 1.65 to 1.94: Cash flow yield range was 3.2% to 3.7%: Dividend yield range was 1.1% to 1.26%

November 1, 2012 3Q:2012 earnings’ highlights:
** Revenue was $621.607 million up from $538.028 million
** TTM revenue was $2.37 billion or $22.88 per share
** Earnings were $0.60 up from $0.45
** TTM earnings were $2.20
** Diluted share count was 103.721 million
** Cash flow for nine months was $112.1 million down from $118.6 million
** TTM cash flow was $135.3 million or $1.31 per share
** Cash $96.795 million: debt $1.1 billion
** Trading range between November 1, 2012 and February 14, 2013 was $30.92 to $38.08: PE ratio range was 14.06 to 17.31: PS ratio range was 1.35 to 1.66: Cash flow yield range was 3.4% to 4.2%

February 14, 2013 4Q:2012 earnings’ highlights:
** Revenue was $565.023 million up from $509.608 million
** Fiscal 2012 revenue was $2.43 billion up from $1.07 billion
** TTM revenue was $24.27 per share
** 4Q earnings were $0.47 up from $0.35
** Fiscal 2012 earnings were $2.29 up from $1.24 per share
** Diluted share count 100.119 million
** Cash flow for the year was $179.286 million up from $130.9 million
** Cash flow per share was $1.80
** Capital expenditures for the year were $41.93 million down from $43.817 million
** Trading range between February 14, 2013 and April 26, 2013 was $37.71 to $43.99: PE ratio range was 16.47 to 19.21: PS ratio range was 1.55 to 1.81: Cash flow yield range was 4.1% to 4.8%

April 26, 2013 1Q:2013 earnings’ highlights:
** Revenue was $664.691 million up 6.5% from $624.272 million
** TTM revenue was $2.47 billion or $24.74 per share
** Earnings were $0.73 up from $0.59
** TTM earnings were $2.43 per share
** Diluted share count 99.861 million
** Cash $176.164 million: debt $1.1 billion
** Cash flow for the quarter $85.6 million up from $61.5 million
** TTM cash flow was $203.39 million or $2.04 per share
** Dividend annual $0.60
** Trading range between April 26, 2013 and the present June 1, 2013 was $42.50 to $47.05

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Member Avatar thomasbihn (37.40) Submitted: 5/10/2013 11:49:58 AM : Underperform Start Price: $44.86 GNC Score: +28.09

I had a very sour experience with them recently and have stopped personally buying from them, favoring the much more reasonably priced Puritan.com instead. It started when I complained that I paid for a Gold Card very recently only to see them roll out a promotion negating my purchase. To add insult to injury, they offered me $10 off an online order, which after shipping, actually cost me more than the same product I could have bought in the store.

That's not the reason I believe the stock will go down though. Once I was upset about essentially paying $4 more when it was supposed to be some savings for me, I explored alternativesand found Puritan.com, where if I calculate correctly based on their current buy 1 get 2 free promotion, reduces my cost by a significant amount.

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Member Avatar dirk55 (< 20) Submitted: 4/1/2013 10:07:34 AM : Outperform Start Price: $37.86 GNC Score: -15.32

VALUE + OUTLOOK + TIMING + QUALITY

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Member Avatar Pops61 (42.58) Submitted: 2/6/2013 12:06:51 AM : Outperform Start Price: $34.40 GNC Score: -9.03

Limited competition, only brick and mortar store to for vitamins, supplements, body building nutrition. Great financials and growth.

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Member Avatar TMFHumbleServant (96.75) Submitted: 10/12/2012 2:01:44 PM : Outperform Start Price: $38.49 GNC Score: -29.46

The health supplement retailer sits in the middle of a strong trend: health and wellness. I am impressed by what I've seen so far and think the company has plenty of growth ahead of it.

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Member Avatar 2trpop (93.75) Submitted: 9/12/2012 3:52:39 PM : Outperform Start Price: $37.51 GNC Score: -34.35

Dividend Payout
POSTED AT 9/12/2012 11:27:52 AM

The stock GNC has paid out a dividend of $0.11. The starting price for your pick has been adjusted to reflect the value of this dividend payout.

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Member Avatar Risky88 (86.14) Submitted: 3/21/2012 3:26:59 PM : Outperform Start Price: $33.13 GNC Score: -13.88

GNC is used by not only high school students, college students, people that regularly go to the gym, but also anyone that's in a sport. The crave for society to become more healthy is on the rise. I recently read a article just yesterday about how soda sales are declining and healthy substitution drinks are increasing. I am in my last year in college and whether it's my friends trying to lose weight because they are overweight or friends that are training for their next marathon, they all go to GNC. Even if their products were more expensive, which they're not because your paying for actual real quality. Anyone that works out will probably tell you the protein drinks you buy at walmart are not high quality and taste horrible. But service at GNC is huge, tell them what you want to do and they can give you multiple different options and actual plans to help you reach your goal. Doing the research on your own is great but you definitely feel better about what your doing when you hear it from a pro that knows about the products they're talking about.Sorry for the rambling, just so much is not known about this company, lots of stipulations or stereotypes.

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Member Avatar MarkSmithJr777 (< 20) Submitted: 8/10/2011 8:47:12 PM : Underperform Start Price: $23.07 GNC Score: -8.18

Products are wayyyyyy overpriced. The only people who shop here are high school kids that want steroids. Once they graduate they realize 1) Everything is cheaper online 2) If I had a credit card in high school I wouldn't have paid $75 for a $15 creatine 3) GNC doesn't sell steroids and thats why I'm 6'2" 130 pounds. Oh I forgot. Terrible stock also.

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Member Avatar macheu02 (29.32) Submitted: 6/14/2011 3:32:26 PM : Outperform Start Price: $18.87 GNC Score: +71.77

GNC is a leading company in an expanding market. Despite having stores nationwide, which limits domestic growth, I believe that the company will be able to increase same store sales with an emphasis on brand name products. Additionally, online sales will contribute to growth.

GNC has enough cash to cover short term debt however, I am concerned about the long term debt.

I will watch earnings closely over the next year and continue to monitor how GNC is handling the long term debt, particularly with new stores (hopefully franchises).

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Member Avatar RyanCoke (99.76) Submitted: 4/4/2011 1:13:24 PM : Underperform Start Price: $16.87 GNC Score: -103.43

I might be early on this as it might continue to rise due to IPO excitement, but long-term I believe this is a dog.

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