Today I decided to buy some stock in Nutraceutical NUTR - a company that sells nutritional supplements and health foods. The market area appears to be quite competitive and it is not clear whether NUTR has significant brand advantage. For me personally, vitamin brands all seem interchangeable, but there may be people who do not feel the same way. The company seems to have done fine so far and I expect that the performance will continue. Consolidation in health foods markets could both help and hurt NUTR, so I won't speculate about it. Another risk is a greater oversight from FDA or other regulatory bodies. Periodically we hear news stories asking for more regulation in the vitamins and supplements market. It is not clear whether much will happen and whether this would have significant influence on NUTR.
The valuation of the company is reasonable. It is not fantastically low, but assuming that they can continue their present course, 13% annual return could be expected, which is fine with me. It seems that right now Chinese herbal medicines and supplements are the rage, but it may be that winds will turn to NUTR's favor in the future.
In other news, I sold my Talbots TLB position. The stock has run up quite a bit with the new CEO announcement. Although it is still somewhat attractive to hold, I hope to reenter it at lower prices if the fundamentals hold together. We will talk about it then. :)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment