The stock has done well recently with a decent move after the declaration of the results. It has moved from $5.65 to around $6.5 which is a good 15% move. On a 52 week basis the stock is up by 63% and has nearly doubled from its 52 week low of $3.35. MTEX is now trading above its 50 DMA ($6.05) and 200 DMA ($5.98). The volumes for this stock are never high, and have come down after the earnings. The move is backed by the fact that the company showed a net profit in Q4'12 compared to net loss of $7 million. As per the management, the turnaround has been recent, and may be expected to continue in the current year. In case the company is able to report turnarounds in the next few quarters, the stock may start a uptrend. There have been other companies in the nutritional supplements market which have improved margins. e.g. MusclePharm (MSLP) improved gross and net margins significantly on a 267% growth in revenues to $78 million. Key to success for MTEX would be development of new products based on what the consumers want. It has been a great supporter of the “open innovation” concept where ideas come from the consumers telling the industry what it wants. The global launch of NutriVerus in May last year has helped the company increase its top line. More such products are required to continuously beat the competition. MTEX has very low debt on books, and is trading at a discount to its book value of $7.64 per share. The price to sales is very low at 0.10 which indicates that if the margins improve, there is tremendous scope for capital appreciation. The dividend yields at current prices will be high and that could be one more reason for adding the stock to its portfolio for the long term.
