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Vitamin Shoppe, Inc. Message Board

  • investora2z investora2z Aug 24, 2013 6:47 AM Flag

    Sentiments have weakened

    The earnings led to another sharp correction in the stock. In fact, the previous two earnings had also led to sharp declines in the stock. Now the stock is nearly 37% below the top made in February 2013, and has just made its 52 week low. The weakness seems to be setting in. This is despite the fact that the company was able to meet the estimate for the bottomline, though it fell short of analyst estimates for the revenue. Analysts have become more negative on the stock. An article on seekingalpha has recommended a short on the stock. It is interesting to note that the company is still managing to grow the top and the bottomline at a decent pace, though the pace of growth may be getting slower. The correction in the stock has made the valuations better than companies like GNC Holdings (GNC). The price to earnings, price to sales and price to book ratios are now lower, and the company does not have any debt on books. So it boils down to the expectations of growth from the company in the future. Also, the margins need to be improved significantly. GNC has most of its sales coming from proprietary products which helps it maintain much better margins. On the other hand, Vitamin Shoppe is more dependent on national brand products. Here, high growth potential offerings from smaller companies can be considered as better margins can be negotiated. Chromadex Corporation (CDXC) has launched a couple of high potential molecules recently. Vitamin Shoppe can look for other companies which may be more in line with its product line and growth strategy. It has decent expansion plans and has high hopes from the e-commerce segment. Contribution from super supplements is also expected to help the growth. There is a urgent need to show marked improvement soon so that the sentiments can improve.

 
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