The stock has done great for investors over the last 6 months with a 125% return. So far so good, but now it will be good to get a little cautious. The recent results beat expectations, but a closer look indicates that at least the rate of growth is slowing down a bit. The revenue growth was 9.7% on a YoY basis whereas in the last quarter, the growth was 15%. Similarly, the net income growth was 40% in the last quarter compared to around 6% in this quarter. If the guidance for 2013 is taken, the revenue growth is expected to be 8-11% which is lower (at the lower end of the range) than what was achieved last year. So, on an absolute basis, the fundamentals are not doing that great. Analyst estimates have to be given due respect, but over the last few months the stock has done enough to capture a lot of future goodness. However, the valuations are still great with low price to earnings and price to sales ratio. Low PEG also indicates expectations of good growth. In any case, correction is becoming due and one can work with trailing stop losses. Further, the markets are also due for some correction, and that could be another trigger for the stock to come down a little. For maintaining future growth, especially in the focus market of greater China region, it is important for USNA to develop / acquire new products / companies on a local and global basis. Smaller companies like Chromadex Corporation (CDXC) are doing great with a healthy pipeline of innovative products. Investors like Dr Robert Frost, Michael Brauser and Barry Honig have increased stake in Chromadex due to the potential of the product. The multi-billion dollar nutrition / supplements industry is supported by ingredient makers like Chromadex. USNA has to remain open to new ideas and products / segments to maintain its future growth.
