StockCall Research on Nu Skin and Avon: Survival Mode Engaged

Tue Jan 22, 2013 8:06am EST

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LONDON, January 22, 2013 /PRNewswire/ --

    Tough economic scenario plays havoc on all kinds of stocks, but its impact is more
pronounced for the sectors led by discretionary spending. When one has to budget ones
income and spending, it is obvious that he would put his basic needs over his desire to
spend money on facial creams and other personal care products. In light of this,
StockCall has started preliminary reporting on Nu Skin Enterprises Inc. (NYSE : NUS) and
Avon Products Inc. (NYSE : AVP). Access these free reports now at  

    Tough Times at Avon  

    So, naturally, companies like Avon Products Inc. and Nu Skin Enterprises are going
through tough times. Avon has been long regarded as an attractive stock for investors
looking for its steady dividend income. However, late last year, the company announced a
dividend cut, bucking the 22-year long trend of dividend increases. Get our analyst
technical insight on Avon by registering today at

    Dividend cut is not the only woe that this direct sales giant is facing. In fact,
dividend cut in itself points to bigger strategic level problems with the company. Avon
had been facing declining EPS for the past couple of years. The first three quarters of
the current fiscal year have not been kind either. The company not only reported a
decline in its EPS, but its revenue also dropped. It now seems to be in the full
life-saving mode to regain its position in the industry. The company let go of its long
time CEO Andrea Jung, who has been partially blamed for the decline in the company's
fortunes. Under Jung's leadership, Avon tried to make foray into the traditional retail
model for its products, veering away from its unique proposition of being a direct sales
company. As the financial figures would tell you, the move failed miserably as the new
strategy placed the company directly in competition with personal care products giants
like P&G and Johnson & Johnson.  

    Nu Skin Does Relatively Better  

    Nu Skin Enterprises Inc. [Free Research Report on NUS 
[ ]] [1], on the other hand, is looking to report
19 percent increase in its revenue for the fourth quarter of the year. It is scheduled
to announce its fourth quarter financial numbers on February 6th. However, not all is
well with Nu Skin either. The company's business model is under considerable scrutiny
after the Herbalife hullabaloo in the market. Like Herbalife, Nu Skin also operates on
Multi Level Marketing model and thus is likely to be taken as a pyramid scheme. Nu Skin
has the usual mix of anti ageing products and nutritional supplements in its portfolio.
While the company is reporting consistent growth in its sales and profits, it is
difficult to ignore that MLM companies have long been accused of providing misleading
figures. Therefore, it is difficult to take the financial numbers at their face value.  

    Both Avon and Nu Skin are looking to expand their brands in international markets.
While Avon started the process under its erstwhile CEO Andrea Jung and yielded lukewarm
results, Nu Skin is about to go ahead with its five-year plan to consolidate its
position in emerging markets like China.  

    Avon is also looking at dire times as it plans to slash its workforce by 1,500 in
order to curtail costs. The company also made questionable decision to forego Coty offer
of $24.75 per share. Its stock is now trading in the vicinity of $16 a pop. Apart from
tough economic scene, both the companies seem to be dealing with myriad of internal
problems like questionable business model and inefficiencies.  


        1) Nu Skin Enterprises Inc. Technical Analysis [

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