The Way To Connect With Direct Selling Industry

The Way To Connect With Direct Selling Industry

Direct Selling Capital Advisors April 2021 Stock Watch

The Direct Selling Capital Advisors Direct Selling Index (DSCI) rose 3.1 percent in April, compared to a slightly smaller rise of 2.7 percent for the Dow Jones Industrial Average (DJIA). March was a difficult month for direct selling equities, but April proved to bring the group moderately higher, with the Direct Selling Capital Advisors Direct Selling Index (DSCI) climbing 3.1 percent. The DSCI has risen in April, bringing it in step with the broader markets.

The DSCI has gained 79.1 percent since the tracking period began on March 1, 2020, compared to 33.3 percent for the DJIA. On a year-to-date basis, the DSCI has a slight advantage over the DJIA, with gains of 11.4 percent vs. 10.4 percent for the DJIA.

Large-Cap Stocks
The majority of the large-size firms in the DSCI monitoring set reported good sales, exceeding even optimistic expectations, with average year-over-year revenue growth of 63.3 percent in this group. Even the firm that trailed the group with the slowest growth increased by more than 15%. The firms’ combined sales increased by $2.76 billion in the first quarter.

The domestic market is driving most of this expansion. Medifast, Inc. (NYSE: MED), a predominantly domestic firm, increased revenue by 91 percent year over year, while Nu Skin Enterprises, Inc. (NYSE: NUS) increased sales by 97 percent year over year.

According to the first quarter statistics for this grouping, 80 percent of the 50 firms in the tracking set recorded revenue increase year over year in the first quarter of 2021.

• Betterware de Mexico (NASDAQ: BWMX) went public last year after merging with a particular purpose acquisition company (SPAC) and has since been a new standout among the big cap monitoring group. The direct Mexican seller now has a market valuation of almost $1.7 billion, up about 22% in the last month and nearly 40% year-to-date.
• Tupperware Brands Corporation (NYSE: TUP) lost 7.7% in April, but it is still one of the top performers in the tracking group, with gains of 755.1 percent since February 28. The company’s recovery strategy has seen substantial success in the past year, including a return to considerable growth and a cleaner financial sheet.
• The stock of Nu Skin Enterprises, Inc. (NYSE: NUS) remained essentially unchanged in April, but it is still up 123 percent from February of last year. For most of the month, the stock moved in a sideways consolidating pattern. The company’s sales increased by 31% in the first quarter, and the stock has subsequently risen sharply.
• Herbalife Nutrition, Inc. (NYSE: HLF) has nearly identically mirrored NUS’s trading pattern, trading lower for several months before accelerating upwards on first-quarter solid results. HLF rose 3.2 percent in April and is now 41.4 percent higher than it was in February 2020.
• In April, Medifast, Inc. (NYSE: MED) gained 7.2 percent, putting it 185.7 percent over where it was on February 28, 2020. The stock traded in a tranquil but rising pattern for most of the month before surging higher upon reports of a 91 percent year-over-year sales increase in the first quarter.
• USANA Health Sciences, Inc. (NYSE: USNA) has had a great run in recent months, hitting many 52-week highs in early 2021. Despite spending much of April in a tight consolidating pattern with an upward bias, the business announced a 15.5 percent year-over-year sales increase in the first quarter and traded sharply downwards.
• In April, eXp World Holdings (NASDAQ: EXPI) fell 24.6 percent. This year, the firm has had a phenomenal success story, with shares up 8.9% year to far and 618.8% since March 2020. Despite reporting record sales and growth in the first quarter, the company fell short of analyst forecasts and saw its stock fall as a result.
• Primerica, Inc. (NYSE: PRI) rose 8.1 percent in April, putting it 45.4 percent higher year-to-date and 19.7 percent higher since March 2020. The firm announced a year-over-year sales increase of 21% and has been gradually increasing since then.

Small-Cap Stocks
With a market value of $412 million, Nature’s Sunshine Products, Inc. (NASDAQ: NATR) is the largest company in the tracking set.
It maintained its overall upward trend, with new 52-week highs being achieved regularly. The stock rose 4.3 percent, putting it 168 percent higher than its March 2020 lows and 47 percent higher year-to-date. The firm generated $102.6 million in revenue in the first quarter and has subsequently been trending downwards.

Short Interest Data & Analysis
Short interest in industrial stocks fell somewhat in April but remained within the same range of 3.5 days to cover. The percentage of sell-side analysts who retain “buy” and “hold” recommendations on industry stocks remained stable at around 97 percent, while the number of analysts who suggest “hold” rather than “buy” climbed somewhat. The number of analysts who maintained a “sell” position was insignificant.

“To say direct selling firms had good first-quarter financial performance is an understatement,” said Stuart Johnson, CEO of Direct Selling Capital Advisors. “While we had anticipated a strong showing, they, for the most part, knocked it out of the park, with an average revenue increase of 63.3 percent across our big cap monitoring group. While we continue to expect that year-over-year growth would likely moderate in the second quarter of this year, we are now more than confident in estimating that domestic direct selling revenue will reach new highs in 2021.

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