NUTR: High ROIC and earnings yield combination

Nutraceutical International Corp (NUTR) with its relatively high ROIC and earnings yield combination coupled with the additional small insider purchases forced me to take another look at this stock I own.

Industry = Drug Related Products

Insiders step up and add to their position but the activity has been less than perfect.



EV = 143,101,200
MC = 103,280,000
EV/Sales = .8650%
Trading at a historical discount
YOY Qtry Rev Growth = -5.60%
Shares outstanding consistent over several years
OI/EV = 14.12%
CFFO/EV = 30.58%
FCF/EV = 5.97%
EBITDA/EV = 20.04%

Short % Float = .20%

52WkChng = -28.34%

ROA = 9.47%

My comments back on April 14 when the stock was ~7.

Nutraceutical (NUTR) has successfully created shareholder value with a sensible capital allocation strategy. ROIC before taxes has averaged an enviable 21.58% for the past 4 reported fiscal years but has fallen to 13.81% for the most recent year end. The drop is not due to the margin compression that has actually risen from 52.56% in 2004 to 54.40% 09/08. The lower ROIC is directly attributable to SGA increasing 31.87% from 2004 coupled with sales improving 18.56% forcing operating margins to decline. But based on ROIC NUTR solidly outperforms its publicly held direct competitors: Schiff Nutrition (WNI), Natural Alternatives (NAII), NBTY (NTY), Natural Alternatives International (NAII) or Mannatech Inc (MTEX). At this point the profitability for NUTR is significantly higher than its peers and represents a bargain price with a current EBITDA/EV at 25.20%. Historical it has managed to keep its capital structure clean with a relatively constant outstanding share count over the past several years. The solid financial health is supported by years of well managed strong FCF.

Business summary taken from Yahoo

"Nutraceutical International Corporation engages in the manufacture, marketing, distribution, and retail of branded nutritional supplements and other natural products in the United States and Internationally. The company's products include vitamins and minerals, herbs, specialty formulas, and other products offered in various formulations and delivery forms, including capsules, tablets, softgels, chewables, liquids, creams, sprays, powders, and whole herbs. It also publishes, prints, and markets a line of books and booklets to book distributors, national retail bookstores, and health and natural food stores; distributes branded products of certain third parties; and owns neighborhood natural food markets and health food stores. Nutraceutical International sells its products primarily to and through domestic health and natural food stores. The company was founded in 1993 and is based in Park City, Utah.?"

Other potential value stocks on June 4/5 that had positive insider activity were the following. Hope you find the data useful.


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