USANA Health Sciences Upgraded to "Buy" From "Hold" Status
Recently, Zacks Investment Research updated its rating of USANA Health Sciences from “hold” to “buy.” What does that mean? It's a suggestion that investors who don't own any stock in the company might want to consider purchasing some. The company is moving forward and growing in the market, so that makes it a better risk for investment. The company's previous rating was held, which means that investors who already have the stock in their portfolios should hold onto that stock. They don't need to sell it, but they aren't recommended to buy any more, either. With the upgrading, buying the stock is deemed a better investment than before.
Ahold rating is generally the equivalent of keeping up with the market. It means the company is doing as well as they were expected to do, and as well as its typical competitors are doing. But when a company is upgraded to a buy rating, it's an indication that investors think the company is going to outperform expectations and do better than the market average. That means the company will perform better than its competitors, too, and could improve its position in the market and see its stock prices rise significantly over time if investors buy-in and continue to focus on choosing the company over its competition.
Part of the reason the company has received a buy rating and been upgraded from its hold rating is the USANA Cellsentials line, which are supplements designed to support health and wellness. Seeing the company continue to grow and develop is one of the reasons Zacks currently has a target price of $98.00 for the company's stock shares. As more products are created, it appears that the company may also continue with its growth. That is keeping investors happy and making them more comfortable with USANA as a long-term investment and an addition to their portfolio. Personal care, nutritional, and weight management supplements are all part of the USANA line and are popular with their customers.
The distribution of the USANA Cellsentials line and other offerings from the company are gaining ground with both customers and investors. There are three different areas for investors and consumers to consider, and the company has committed to providing additional opportunities for wellness support to its customer base. Zacks appears to be on the right track by changing the company's rating from hold to buy. But Zacks Investment Research isn't the only place that's done that. Other companies are starting to recognize the value of USANA's stock and suggest that it could be something for investors to explore.
For example, Roth Capital added its buy rating and raised a price objective on the stock. They performed what's called a valuation call, on the premise that the stock would rise even more in the future. Because investors are showing more interest and the company is performing well in the market and with its consumer base, both Roth Capital and Zacks are suggesting that the stock may be a preferable buy to its competitors. Outperforming market expectations is a good thing, and something USANA Cellsentials appears to be doing well.
Once the buy recommendations were made, USANA stock opened at over $98 per share. In a 50-day moving average, the price was just over $81, with the 200-day moving average close to $79 per share. Every indication was that the stock was currently rising and would likely continue to rise in the immediate future. While it might not be rising rapidly, the strength of its growth is beyond what's typical for the market and its competitors. With the buy ratings in place and the growth of the stock, more investors may consider buying shares of USANA in the coming days and weeks.
By comparing USANA with its competitors, the expectation is that the company will see a more aggressive stock climb. People who choose to invest in the company now could put themselves in a better position than people who decide to wait and see what happens. USANA currently has a market capitalization of over $2 billion and has posted consistent quarterly earnings that have either met or exceeded what analysts and investors expected to see. The year-over-year growth of the company's revenue has also been over 14%, and there is a concern among some that the stock may be undervalued.
One of the indications of potential undervaluation is the repurchase program for the company's shares. The members of its board have authorized a repurchase of as much as $150 million in company shares. That could allow the company to buy more than 8% of its current, outstanding stock by purchasing it on the open market. While that doesn't mean the shares are undervalued, it's one of the stronger indications that the board may have this opinion about its stock. As the company begins to buy the stock back on the market, that could lead to a rise in the stock price and potentially more success for investors who hold the stock.
Several hedge funds have changed their position on USANA. Some have reduced their stakes in the company and others have added to their stakes. For example, Royce & Associates LP has lifted its position by 16.5% and Euclidean Technologies Management LLC has lifted its position by almost 14%, both in the fourth quarter. Duality Advisers LP, Quantinno Capital Management LP, and ProShare Advisors LLC have all purchased new stakes during that time frame. Now, slightly more than 54% of USANA's stock is owned by institutional investors.
Among the product lines that are bringing the company so much success is the USANA Cellsentials line of vitamin and mineral supplements. These supplements provide support for overall body health and wellness, along with nutritional support. Cardiovascular and digestive systems are two of the areas supported by Cellsentials, as USANA works toward providing the kind of support desired by people who are looking at their overall health and considering ways it can be monitored and improved more easily. With the upgrade of USANA stock from hold to buy, uncertain investors are considering how and when to make their next move.
That could result in the price per share increasing, and the buyback that's going to take place from the company could add to that, as well. Investors will have to watch the market carefully to see what USANA stock does in the coming days, to make the right choice for their investment goals and plans. There are several reasons why the board might have decided to repurchase some of the company's stock, so assumption could lead to trouble for investors if they aren't careful about how they're proceeding with USANA.
In the future, both Zacks and Roth Capital may decide to change USANA's rating again. Most companies don't have stocks that stay in one category or rating level all the time. For now, though, the consensus among analysts is that USANA's stock is going to outperform the market and the competition, at least for the time being. By purchasing now, investors may be able to get shares of this stock for a better price than will be available to them in the future. If the analysts didn't think USANA had a strong future, they wouldn't be suggesting that investors purchase stock in the company.
Many people continue to look for support for their overall health and wellness, as well as supplements and nutritional options that fit their lifestyle and goals. USANA Cellsentials provides that for many people, and as the company continues its growth it stands to reason that buying stock in it could be a wise move. Time will tell how well USANA performs in the long term, but for now, companies like Zacks see USANA as a good investment.