Tuesday / July 5. 2022
menu-logo menu-logo
brand-logo
Subscribe
Subscribe
Tuesday / July 5. 2022
  • Read
    • Daily News
      • Financial
      • Insights
      • U.S.
      • International
    • Cover Stories
    • Feature Articles
    • Company Spotlights
    • Exclusive Interviews
    • Executive Announcements
    • Forward Thinking
    • New Perspectives
    • Working Smart
    • From the Publisher
    • Digital Issue
  • Listen & Watch
    • Direct Approach
    • Iconic Insights
    • The DSN Podcast
  • Attend
    • Direct Selling University
    • Jason Dorsey Event
    • Global Celebration
  • Achieve
    • Global 100 List
    • CCR Program
    • Best Places to Work
    • Bravo Awards
    • Legends
  • Join
    • Membership
    • VIP Community
  • Research
    • Digital Momentum Index
    • Stock Watch
    • Stock Ticker
    • Supplier Directory
    • Resources
  • About
    • About DSN
    • Subscribe
    • Advertise
    • Store
    • Connect
  • Search
Subscribe

October 2011 – Market Turmoil Continues

BY DSN Staff | October 01, 2011 | read / Daily News / Financial

Canaccord GenuityThe fundamental trends of sales and earnings for direct selling companies were not among investors’ top interests during August as broader economic concerns such as shaky European sovereign debt, political turmoil in the United States and an unprecedented downgrade of U.S. debt led the stock markets into a free fall, followed by a rally, followed by a free fall, followed by a … well, you get the picture. The outlook has become uncertain for stocks in the near term as the vicious circle of lost wealth in the stock market will undoubtedly impact consumer spending, and plummeting consumer confidence supports this outcome.

What has occurred, however, is that investors have begun to more aggressively seek out stocks where there is less economic sensitivity. As has historically been the case and validated by research from the Direct Selling Association a few years ago, direct selling generally outperforms the broader trends in GDP performance, including during times of economic weakness. Direct selling isn’t counter cyclical by any means, but there certainly are some offsets to consumer spending declines inherent in the business model given participants not only market products and services, but also part-time supplemental income opportunities. The historical performance of direct selling should lead to outperformance of the sector on Wall Street during trying times such as this summer. While many of the public companies didn’t see this outperformance this month, the fact is that the average direct selling company included in this monthly compendium fell less than the broader market did during August. The average stock fell roughly 1% vs. a 6% decline for the S&P500. If we focus in on just the larger pure-play direct selling stocks with market capitalizations over $100 million, the average fell just under 2% during the month. We won’t say that misery loves company, but it is at least good to outperform that company.

While the focus during the end of summer was on stock market volatility, there have been some positive developments among some of the publically traded companies to note. First, Blythe reported favorable growth during its second quarter on the heels of continued momentum at ViSalus that offset declines at Partylite. Investors rewarded the trends and favorable guidance for the remainder of the year with a solid share price rally that led to a new multi-year high in early September that recovered all of the August share price losses. The investor enthusiasm for the results was further aided by expectations that Blythe will acquire the remaining 42.5% of the company it does not currently own.

Nu Skin Enterprises enjoyed the most robust stock price performance during August among the larger cap stocks as investor expectations for its next stage of Age Loc product launches and the impact to sales momentum are rising rapidly. Another major corporate development was that China-based Tiens Biotech went private during August and trading was suspended.

While August wasn’t a good month and September hasn’t shown much improvement at the time of this writing, the good news is that the direct selling group as a whole is holding its own among the market turmoil. As investors see how calendar third quarter results trend, and if they reflect some economic resilience as history would indicate, the Wall Street view may improve.


Scott Van WinkleScott Van Winkle is a Managing Director of Equity Research at Canaccord Genuity, the global capital markets division of Canaccord Financial. Canaccord Genuity offers institutional and corporate clients idea-driven investment banking, research, sales and trading services from 16 offices worldwide. Van Winkle, based in Boston, has followed the direct selling channel since 1997.


Disclaimer: Canaccord Genuity has published research
recommendations on Herbalife, Medifast, Nu Skin Enterprises and USANA
Health Sciences and makes a market in shares of Herbalife, Medifast, Nu
Skin Enterprises and USANA Health Sciences. Canaccord Genuity has
provided non-investment banking securities-related services to Herbalife
and Nu Skin Enterprises in the last 12 months. Past performance is not
indicative of future results and these comments are not a recommendation
to buy or sell the specific securities discussed.

Posted in Daily News, Financial
Related Articles
Telecom Plus Reports Record Results and Sustainable Growth Expectations  June 21, 2022

Telecom Plus Reports Record Results and Sustainable Growth Expectations 

Read more
Coway Reports Q1 2022 Revenue of $730 Million  May 20, 2022

Coway Reports Q1 2022 Revenue of $730 Million 

Read more
Nature’s Sunshine Net Sales Reach $110.5 Million in Q1 2022  May 10, 2022

Nature’s Sunshine Net Sales Reach $110.5 Million in Q1 2022 

Read more
brand-logo
The News You Need.
The Name You Trust.
Subscribe

Breaking global news, emerging trends and powerful stories conveniently curated to help direct selling executives stay informed, engaged and a step ahead.

  • Read
  • Listen & Watch
  • Attend
  • Achieve
  • Research
  • About
  • Connect
5800 Democracy Drive
Suite 100
Plano, Texas 75024
info@directsellingnews.com
Copyright 2022 Direct Selling News | All Rights Reserved
  • Privacy Policy
  • Terms of Use
  • Advertise
  • Subscribe
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT