On Dec 5 2016, we issued an updated research report on Pittsburgh, PA-based GNC Holdings, Inc. (GNC - Free Report) , a leading global specialty retailer of products for health and wellness, including vitamins, minerals, herbal supplement, sports nutrition and diet. The company currently carries a Zacks Rank #5 (Strong Sell).
Greater part of last six months witnessed GNC underperforming the Zacks categorised Retail-Drug Stores industry with respect to price movement. A disappointing third-quarter 2016 performance with both earnings and revenues lagging the respective Zacks Consensus Estimate, resulted in further decline in share price return of the company.
While the domestic market demonstrated poor performance, GNC Holdings’ operating results in overseas markets were also unsatisfactory. Overall the company’s stock lost 46.98%, much wider than 8.52% loss of the broader industry over the last six months. A negative estimate revision trend with seven downward revisions over the past two months with no upward movement, indicate very low chances of near-term recovery. Earnings estimates declined 8.4% over this period.
Foreign currency also played spoilsport, particularly in Mexico. That said, it is worth mentioning that management still believes that international markets hold a tremendous potential for GNC Holdings. The company is thus engaged in capitalizing on opportunities there.
We are also looking forward to the company’s latest business plan termed as ‘New GNC' where management announced several strategies to revamp its existing business model. The model includes lowering of single product pricing policy, a new product pipeline, free and paid loyalty program, new customer friendly technology which includes terminals, tablets, Wi-Fi and a new mobile app that improves and personalizes the shopping experience. By the end of 2016, we expect more clarity on the entire matter.
On the flip side, the nutritional supplements industry is characterized by rapid and frequent changes in demand for products and new product introductions. Moreover, GNC Holdings’ international competitors include large international pharmacy chains, major international supermarket chains and other large U.S.-based companies with global operations.
Management fears that in the face of stiff competition, the company may fail to function effectively and its attempts to do so may require it to reduce prices, which in turn may hurt margins. Further, currency devaluation in Mexico adversely affected consumer demand within GNC Holdings’ international business.
Stocks to Consider
Some better-ranked stocks in the medical sector include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 27.3% over the last one year compared with the S&P 500’s 7.2% growth over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.
Baxter International rallied 18.3% over one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 124.3% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Dec 5 2016, we issued an updated research report on Pittsburgh, PA-based GNC Holdings, Inc. (GNC - Free Report) , a leading global specialty retailer of products for health and wellness, including vitamins, minerals, herbal supplement, sports nutrition and diet. The company currently carries a Zacks Rank #5 (Strong Sell).
Greater part of last six months witnessed GNC underperforming the Zacks categorised Retail-Drug Stores industry with respect to price movement. A disappointing third-quarter 2016 performance with both earnings and revenues lagging the respective Zacks Consensus Estimate, resulted in further decline in share price return of the company.
While the domestic market demonstrated poor performance, GNC Holdings’ operating results in overseas markets were also unsatisfactory. Overall the company’s stock lost 46.98%, much wider than 8.52% loss of the broader industry over the last six months. A negative estimate revision trend with seven downward revisions over the past two months with no upward movement, indicate very low chances of near-term recovery. Earnings estimates declined 8.4% over this period.
Foreign currency also played spoilsport, particularly in Mexico. That said, it is worth mentioning that management still believes that international markets hold a tremendous potential for GNC Holdings. The company is thus engaged in capitalizing on opportunities there.
We are also looking forward to the company’s latest business plan termed as ‘New GNC' where management announced several strategies to revamp its existing business model. The model includes lowering of single product pricing policy, a new product pipeline, free and paid loyalty program, new customer friendly technology which includes terminals, tablets, Wi-Fi and a new mobile app that improves and personalizes the shopping experience. By the end of 2016, we expect more clarity on the entire matter.
On the flip side, the nutritional supplements industry is characterized by rapid and frequent changes in demand for products and new product introductions. Moreover, GNC Holdings’ international competitors include large international pharmacy chains, major international supermarket chains and other large U.S.-based companies with global operations.
Management fears that in the face of stiff competition, the company may fail to function effectively and its attempts to do so may require it to reduce prices, which in turn may hurt margins. Further, currency devaluation in Mexico adversely affected consumer demand within GNC Holdings’ international business.
Stocks to Consider
Some better-ranked stocks in the medical sector include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 27.3% over the last one year compared with the S&P 500’s 7.2% growth over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.
Baxter International rallied 18.3% over one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 124.3% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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