Summary
- Despite generating less income for Q1 2017 due to a delay in distributors recruiting, business fundamentals remain strong.
- Valuation metrics indicate that the firm is on sales at a significant bargain.
- The prudent course of action is to initiate small purchases while awaiting the upcoming quarter results.
Background
Similar to notable companies operating in the wellness products market, Natural Health Trends (NASDAQ:NHTC) suffered substantial share price depreciation in 2015 due to activist investors’ campaigns and regulatory difficulties. As Chinese authorities probed the firm’s alleged multi-level marketing (“MLM”) practice, the stock tumbled from its $51 peak on Nov. 13, 2015, to $17 by Jan 16 a year ago.
In the triumphant note for shareholders, Natural Health Trends has been vigorously defending against all claims, and thus brought the stock back to $28 as of late. Activism asides, the firm is posting robust yearly earnings growth. And yet, its valuation metrics are highly favorable.
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