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Can Nu Skin Be a Solid Choice for Value Investors?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Nu Skin Enterprises Inc.(NUS - Free Report) ) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Nu Skin has a trailing twelve months PE ratio of 16.48, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 19.61. If we focus on the long-term PE trend, Nu Skin’s current PE is somewhat above its mid point level. However, the number has fallen rapidly in the last few months.
Further, the stock’s PE also compares favorably with the Zacks classified Cosmetics & Toiletries industry’s trailing twelve months PE ratio, which stands at 22.59. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Nu Skin has a forward PE ratio (price relative to this year’s earnings) of 16.45, which is roughly in line with the current level, so we might say that forward earnings estimates are already incorporated in the company’s current share price.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Nu Skin has a P/S ratio of about 1.23. This is much lower than the S&P 500 average, which comes in at 2.93 right now.
Broad Value Outlook
In aggregate, Nu Skin currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Nu Skin a solid choice for value investors.
Additionally, its P/CF ratio (another great indicator of value) comes in at 9.72, which compares favorably to the industry average of 13.22. Clearly, Nu Skin is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Nu Skin might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘A’. As a result, Nu Skin has a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one estimate go higher in the past sixty days compared to two lower, while the full year estimate has seen two estimates going up and no downward movement over the same time period.
As a result, the current quarter consensus estimate has decreased 1.25% over the past two months, while the full year estimate has increased 2.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Nu Skin is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among the Bottom 38%) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past one year, the Zacks Cosmetics & Toiletries industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Can Nu Skin Be a Solid Choice for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Nu Skin Enterprises Inc. (NUS - Free Report) ) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Nu Skin has a trailing twelve months PE ratio of 16.48, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 19.61. If we focus on the long-term PE trend, Nu Skin’s current PE is somewhat above its mid point level. However, the number has fallen rapidly in the last few months.
Further, the stock’s PE also compares favorably with the Zacks classified Cosmetics & Toiletries industry’s trailing twelve months PE ratio, which stands at 22.59. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Nu Skin has a forward PE ratio (price relative to this year’s earnings) of 16.45, which is roughly in line with the current level, so we might say that forward earnings estimates are already incorporated in the company’s current share price.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Nu Skin has a P/S ratio of about 1.23. This is much lower than the S&P 500 average, which comes in at 2.93 right now.
Broad Value Outlook
In aggregate, Nu Skin currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Nu Skin a solid choice for value investors.
Additionally, its P/CF ratio (another great indicator of value) comes in at 9.72, which compares favorably to the industry average of 13.22. Clearly, Nu Skin is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Nu Skin might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘A’. As a result, Nu Skin has a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one estimate go higher in the past sixty days compared to two lower, while the full year estimate has seen two estimates going up and no downward movement over the same time period.
As a result, the current quarter consensus estimate has decreased 1.25% over the past two months, while the full year estimate has increased 2.1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
NU SKIN ENTERP Price and Consensus
NU SKIN ENTERP Price and Consensus | NU SKIN ENTERP Quote
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Nu Skin is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among the Bottom 38%) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past one year, the Zacks Cosmetics & Toiletries industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>