(Adds share movement, analyst comments, details, background)
Jan 11 (Reuters) - Usana Health Sciences Inc USNA.O said the U.S. Securities and Exchange Commission recommended no enforcement action at the end of an informal inquiry into the nutritional and personal care products maker, sending shares up as much as 40 percent.
Before Friday’s surge, shares of the Salt Lake City-based company had lost about 39 percent since the SEC ordered the probe in March 2007. Usana had been under SEC scrutiny amid allegations of fraud and questions about its direct-selling business model.
The SEC decision is official proof of the baselessness of the allegations of fraud made against Usana about a year ago, and had positive implications for the direct-selling industry overall, Rommel Dionisio, analyst with Wedbush Morgan Securities, said in a note to clients.
Dionisio upgraded the stock to “buy” from “hold” on the back on the SEC’s closing of the inquiry. He has a price target of $47 for the shares.
The company’s shares rose to an intraday-high of $49.87, before falling back to trade up $9.03 at $44.60 in morning trade on the Nasdaq. (Reporting by Vikram Subhedar in Bangalore; Editing by Pratish Narayanan)