NUTR ==> The Memorial Day Winner

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  • mrmarket
    Administrator
    • Sep 2003
    • 5971

    NUTR ==> The Memorial Day Winner

    Top scientists are now offering compelling proof that vitamins provide important protection against many chronic conditions, including heart disease, cancer, and osteoporosis. That's the good news. Yet only about 30% of Americans take them regularly, report the scientists from Harvard University's Medical School and School of Public Health who reviewed more than 30 years of research on vitamins and chronic disease prevention in the June 19, 2002, issue of the Journal of the Medical Association (JAMA).

    As only 20% to 30% of Americans consume the recommended five daily servings of fruits and vegetables, suboptimal levels of important vitamins are all too common. A little multivitamin health insurance might go a long way.

    Now while $$$MR. MARKET$$$ places a lot of credibility on the latest scientific data, I live more by the philosophy that video est credeo. Based on my own experiences, here’s why I think taking vitamins is a good idea:

    Like to smoke while you drink? You need Vitamin A. Not only does it do all sorts of healthy things like protect your lungs, nose, mouth and throat, it also you see in the dark and makes your bones stronger.

    God's gift to hangovers is Vitamin B1 (Thiamine). It calms your shaky nervous system, helps your weary body break down still-lurking alcohol and has even been known to ease production of the world's worst smell, the hangover fart. So get some, then share it around. While you're there, grab some Vitamin B2 (Riboflavin) for your bloodshot eyes, some Vitamin B3 (Niacin) to break down the 3am pizza, some Vitamin B6 (Pyridoxine) for your cramping calves and some Vitamin B12 (Cobalamin) to get your blood pumping.

    Vitamin C is so legendary that an American doctor once offered to be infected with HIV just to prove that Vitamin C would cure it. Ok, that wouldn’t be my choice for data testing, but we have learned that Vitamin C can help prevent a hangover turning into a long term health problem. How? Put simply, it prevents the bad stuff in cigarettes, alcohol and even hamburger grease from turning into cancer causing oxidants. In fact, according to two times Nobel prize winning chemist Linus Pauling, it can decrease the risk of getting certain cancers by 75%. It even tastes good.

    Vitamin D helps heal that bone you broke proving you can still get in a fistfight after 12 drinks (even though you couldn't before 12 drinks). Also good for your shaky nervous system. Apply Vitamin E orally to help supply oxygen to the blood. Apply to skin after you pass out in the sun and turn a deep, painful shade of red.

    Folic Acid. No major impact on hangovers but it will stop your hair going grey. And that's good if you want to get lucky. Ginko Biloba. It works on Alzheimer's so it's got to do something for hangovers. Also increases mental ability and performance. Might even help you remember the name of that person you woke up with. Iron Tablets strengthen limp muscles and pump cool, fresh oxygen into your blood. Essential for females to keep up drinking strength in the more lethargic time of the month. Orgasm. It's not a vitamin. It's better. Works on every part of your body. Have one today.

    Anyway, if you are a guy and take all of these vitamins, this could be you:




    and if you’re a woman taking vitamins and pumping iron, THIS could be you:




    well…ok maybe that won’t be you. Maybe you? YOU? YOU???

    Today I bought Nutraceutical International Corp (NUTR) at 24.21. I will sell it in 4 to 6 weeks at 28.08. Here’s why I like NUTR:

    NUTR’s stock is up 195% in the last 12 months, yet it’s PE is still cheap cheap cheap at 20.8. For the last 6 months, it’s R^2 is at 0.92, indicating unwavering price momentum, backed by great earnings growth. Look at this chart to see what I mean:




    Our economy is improving, while our demographics are aging. All we’ll have left is a health-conscious population of baby boomers. There is no reason to believe that this trend will not continue, as more people take vitamins and supplements, NUTR’s target market will grow and grow. The company's sales last fiscal year rose 12.3% to $124.5 million - its first double-digit revenue gain since 1997.

    While other firms fell by the wayside, Nutraceutical has managed to generate consistent financial growth. It has been profitable throughout the late 1990s and early 2000s and has grown annual earnings each of the past three years. Nutraceutical International manufactures nutritional supplements. The company's products include blended-herbal products, vitamins, minerals, dietary products, bee-product-derived nutritional supplements, vegetarian products, sport beverages, and energy products. Nutraceutical makes and sells about 3,000 products under a host of brand names. Its three leading brands are Solaray, KAL and Nature's Life. Others include NaturalMax, PremierOne, VegLife, Sunny Green, Action Labs and Thompson. The company's customers include national health-store chains such as Whole Foods Market Inc. and Wild Oats Markets Inc. The foot traffic, number of stores and revenue growth at these two chains has been growing at a double digit clip. More customers at these stores means more people will be throwing NUTR products into their shopping baskets. NUTR has hitched its wagon to the right horse.

    Nutraceutical's strategy is to enhance its position as a leader in supplying quality branded products to health and natural food stores while continuing to generate growth in sales and profitability. Unlike many of its competitors, Nutraceutical has chosen to focus on the health food store channel of distribution. Specifically, Nutraceutical seeks to: Increase market share in health food stores through its:

    o Commitment to health food stores
    o Multiple brand stategy
    o Extensive sales force
    • Continue to make strategic acquisitions
    • Continue to develop new products and product extensions

    The company's earnings last fiscal year, which ended in September, gained 17% to $1.09 a share. Fiscal first-quarter profit this year rose 17% to 27 cents a share. Sales went up 15% to $33.2 million. Net sales for the fiscal 2004 second quarter were $37.6 million compared to $30.6 million for the same quarter of fiscal 2003. For the second quarter, net income was $4.2 million, or $0.35 diluted earnings per share, compared to $3.5 million, or $0.30 diluted earnings per share, for the same quarter of fiscal 2003.

    Net sales for the six months ended March 31, 2004 were $70.8 million compared to $59.5 million for the same six-month period of fiscal 2003. During this six-month period, net income was $7.3 million, or $0.63 diluted earnings per share, compared to $6.1 million, or $0.53 diluted earnings per share, during the same prior-year period.

    ANAL-ysts expect earnings this year to climb 9% to $1.19 a share, then reach $1.44 in fiscal 2005. $$$MR. MARKET$$$ needs some vitamins to calm down, he is laughing so hard. Based on growth projections associated with our revitalized economy, $$$MR. MARKET$$$ sees 2004 revenues at 151 million which would generate an EPS for the year of $1.38. Looking down the road, 2005 revenues will grow to $187 million yielding EPS of $1.86/share. Taking the 2004 earnings of $1.38 and multiplying by the present PE of 20.8 gives you a share price of $28.70, which exceeds my target price.

    NUTR’s price to cash flow sits at 12.5 vs an industry average of 15.6. If NUTR’s valuation corrects itself just by mean reversion to market averages, this alone will take the stock past my sell target. NUTR’s Return on Assets is 16.3% compared to the Industry average of 6.8%. It’s Net Margin % is 10.3% vs. Industry Average of 7.7%. What this means is that customers are placing a pricing premium on NUTR’s brands.

    Nutraceutical has successfully reduced its Long Term Debt from 39 million only 9 million in the last 5 years. Judging by this stock's debt/total capitalization ratio, it has much less debt than most of its peers. This means that they will be poised to snap up some brands and products from some faltering mom and pops and add them to their already robust distribution chain at these health food supermarkets, thus squeezing out even more competition. Nutraceutical believes that the consolidation and integration of acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

    True to word, NUTR has been one of the strongest performers in its industry over the five-year period. Keep in mind when looking at a stock or industry's record that historic returns are not necessarily a predictor of future performance. Persistent strength or weakness, however, may very well say something about the structure of an industry or quality of a company's management.

    Here’s what the boss has to say:

    Bill Gay, chairman and chief executive officer, commented, "We are pleased to report record sales and operating income, which reflect strong contributions from the June 2003 acquisitions of Nature's Life and Arizona Health Foods, as well as ongoing improvements in our overall business. We continue to focus on leveraging our marketing and operational infrastructures as we integrate these acquisitions, and synergies are delivered to our bottom line and to our shareholders. As always, we remain committed to our customers, our employees and to executing our strategy, which includes increasing market share in health and natural food stores through growth from new products and new product categories, as well as through acquisitions.”

    "We are pleased with our net sales and income growth for fiscal 2003 and the most recent quarter. Nutraceutical was formed in 1993 to effect a consolidation strategy in the fragmented nutritional supplements industry. Ten years later, we believe that our Company has become one of the largest manufacturers and suppliers of branded nutritional supplements and other natural products to and through health and natural food stores. We have focused and will continue to focus on new product development, synergistic acquisitions, internal growth, cost management and creating shareholder value.. We remain positive about our business strategy and look forward to the opportunities and challenges that lie ahead as we begin our next decade."

    After being named as one of Forbes top 200 small companies: “ We are honored to be recognized for a second consecutive year as one of the leading small companies in America by making the Forbes 200 list. We believe that we continue to maintain a leadership position in providing quality branded nutritional supplements to health and natural food stores through our continued focus on building a solid company with strong fundamentals.”

    That’s right, the guy’s name is Bill Gay. Well, I will most certainly be gay after I look at my brokerage statement after making this investment.

    I am HUGE!!!
    =============================

    I am HUGE! Bring me your finest meats and cheeses.

    - $$$MR. MARKET$$$
  • spikefader
    Senior Member
    • Apr 2004
    • 7175

    #2
    Hey, he goes with my No.2 pick. Go the bull.
    How do you determine your entry Ernie? Just buy at open? Here's what I see today:
    Last edited by Karel; 10-08-2007, 09:19 AM.

    Comment

    • jiesen
      Senior Member
      • Sep 2003
      • 5320

      #3
      yeah

      if I woke up 10 minutes earlier, that's where I would have bought it.

      not sorry I got in at 24 though!

      Comment

      • mrmarket
        Administrator
        • Sep 2003
        • 5971

        #4
        Originally posted by spikefader
        Hey, he goes with my No.2 pick. Go the bull.
        How do you determine your entry Ernie? Just buy at open? Here's what I see today:

        I have no entry strategy. I know the stocks I pick always go up. It doesn't matter what I pay for them intraday.
        =============================

        I am HUGE! Bring me your finest meats and cheeses.

        - $$$MR. MARKET$$$

        Comment

        • Karel
          Administrator
          • Sep 2003
          • 2199

          #5
          Originally posted by spikefader
          Hey, he goes with my No.2 pick. Go the bull.
          How do you determine your entry Ernie? Just buy at open? Here's what I see today: ...
          You're right of course, but I don't want to sit with my eyes glued to the screen all day (since I live 6 hours earlier than the market, that would be from the afternoon through the evening). My positions are too small for that anyway.

          Regards,

          Karel
          My Investopedia portfolio
          (You need to have a (free) Investopedia or Facebook login, sorry!)

          Comment


          • #6
            Originally posted by Karel
            My positions are too small for that anyway
            Your positions may need some vitamins, so they can become HUGE.

            Comment

            • Ken
              Junior Member
              • Apr 2004
              • 2

              #7
              NUTR Triangle

              You guys are probably right in buying NUTR at this time, but here's my take on it. I see the pattern forming a bullish triangle so I will wait until it moves above the descending trendline at around 25 or lower. This stock does seem like a winner, but I'm willing to wait for confirmation on this next move up. Any thoughts on this strategy?

              Comment

              • spikefader
                Senior Member
                • Apr 2004
                • 7175

                #8
                Originally posted by mrmarket
                Originally posted by spikefader
                Hey, he goes with my No.2 pick. Go the bull.
                How do you determine your entry Ernie? Just buy at open? Here's what I see today:

                I have no entry strategy. I know the stocks I pick always go up. It doesn't matter what I pay for them intraday.
                LOL. What's 2.5% between great stocks huh! May this be one of the upwards from the start ones! I just looked, and the long from the S1 was the perfect entry

                Comment


                • #9
                  NUTR has been on your top five at least the last two times. Bought in this morning @23.85.

                  You most take a lot of their vitamins to counter-attack all the beer and keep yourself HUGE

                  Comment

                  • navysealf-16

                    #10
                    NUTR

                    I'm on a steep learning curve and was concerned about the volume in NUTR. I know it's a long weekend and that volume on the NAZ has been lower than usual -- do you take this into account? Or, is too much importance placed on volume for a "good" stock. Thanks for your very informative site.

                    Comment

                    • mrmarket
                      Administrator
                      • Sep 2003
                      • 5971

                      #11
                      Re: NUTR

                      Originally posted by navysealf-16
                      I'm on a steep learning curve and was concerned about the volume in NUTR. I know it's a long weekend and that volume on the NAZ has been lower than usual -- do you take this into account? Or, is too much importance placed on volume for a "good" stock. Thanks for your very informative site.
                      I hardly ever look at volume.
                      =============================

                      I am HUGE! Bring me your finest meats and cheeses.

                      - $$$MR. MARKET$$$

                      Comment

                      • Karel
                        Administrator
                        • Sep 2003
                        • 2199

                        #12
                        Originally posted by stenzrob
                        Your positions may need some vitamins, so they can become HUGE.
                        I got some, don't worry! Or did you mean a different kind of food supplement?
                        My Investopedia portfolio
                        (You need to have a (free) Investopedia or Facebook login, sorry!)

                        Comment

                        • rickg777
                          No Posting allowed; invalid email
                          • Mar 2004
                          • 25

                          #13
                          Nutr= Great pick! I'm already up 23% since getting in on 3/23. Looking forward to the next 15%. It hasn't been below its 30DMA since the beginning of Jan. and not below 50DMA since last May. I can't see how trailing stops could have hurt here. If you bought back on 1/16 at the breakout and put a TS at 30DMA you'd be up 39% now and still going strong. The same goes for DECK, back around 11. (I don't like to buy anything under 10, I use full margin and watch very closely, so $$$ wise +23%= +69%). Just some friendly advice, take it or leave it.

                          Comment

                          • Websman
                            Senior Member
                            • Apr 2004
                            • 5545

                            #14
                            Once again, Mr Market picks a stock with good potential.

                            I will have to consider buying NUTR to bring me closer to my goal of being a multimillionaire. I'm going to be greedy, however, and wait for a lower buy point to get in.
                            I believe I'm going to need a large vault to store my huge amounts of money that are coming my way.

                            Good luck everyone!

                            Comment


                            • #15
                              Following Progfits with stops

                              Do you ever consider following profits over 15% by use of stops?

                              Comment

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