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Nu Skin Enterprises Inc. Message Board

  • baoyu.daiyu baoyu.daiyu Jan 16, 2014 7:40 AM Flag

    Serious Damage, $80 Target

    Anyone from China knows the implication and power of People's Daily. It is official. No article would be published without levels of scrutinization. Yesterday's article will have serious damages on the business, earnings, growth, and risk:

    1. Consumers will buy less. The reputation is damaged.
    2. The approval from municipal governments will be halted. (Any official is stupid enough to go against the wind to issue a new license at this time?) Those which have issued licenses may review or even revoke the licenses.
    3. The cheating and related personnel will be hold responsible or even charged. The company could lose sale people or even have to do a re-org.

    All this will cause significant drop in earnings. I expect only $6.5 for 2014. And significant reduction in the growth rate and the stock multiple. I expect a P/E of 14. The risk profile has significantly increased. As a result, a target price of $90. But because this stock is mainly owned by momentum traders, oversold conditions will occur. So $80 will be reached. This conclusion is merely based on earnings reduction and risk. I have not taken into account the much more serious fatal outcome -- shut-down of illegal business.

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    • The #$%$ are coming out of the woodwork!!! I love it!!! They've been doing business in China for 11 years and you were unaware they were running a pyramid scheme???

    • My prediction is well on target today. Watch tomorrow and Monday. It could hit low 80's again.

    • I would say 40.

      • 1 Reply to tshih_90630
      • I'm short 138 and my price target is 0.00. I have a mental stop of 130 (which will not get taken out). Its been a difficult hold until this finally happened. The complacent longs were trying to pump this to new, hopelessly unjustifiable highs last week. I have no intention of getting out of this trade as I firmly believe a halt will eventually come and possible delisting if there is any justice out there.

        This is a company that shouldn't exist. It is a complete fraud. It is about to attract major short sellers. They operate illegally in China and they sell products that are ineffective snake oil (not my words, but disgruntled buyers).

        The chickens have come home to roost. Congratulations to the strong handed shorts who place fundamentals and technicals above idiotic pumping. As for the longs: take this as a lesson on why buying hyped frauds doesn't work.

        Sentiment: Strong Sell

 
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