NHTC - Natural Health Trends Corp

[cameronfen]

This is an MLM, that is growing at over 100% a year with an ROI of about approximately 100%.  Most of the company's business is in Hong Kong, although the company is headquartered in the US.  The company has  P/E of about 10, but the number is more like 8 when you throw in net cash.  The big question with MLM's is how good the product is.  MLM's can grow a lot just by attracting a lot of distributors but if the distributors get disillusioned the massive growth can implode as people stop buying the product (see Ackman's HLF presentation).  The company has toeholds in other countries but Hong Kong is about 90% of revenue and increasing.  I know a little bit of chinese but I can't really read very well, so I would be interested to look at how Hong Kong distributors like the product and how easy it is for them to sell it. 

[Voodooking]

This looks interesting to me as the P/E is now 5.61, Current Ratio is 2.47, Return on Assets has remained strong at between 40% and 45%, and it's selling at about 5 times cash flow.

 

Only thing that worries me is how long will this last, and the fact it is based on emerging market economies.

 

Anyone taken a position in it? I'd be interested to hear other people's thoughts...  :)

[benbuffett]

Was looking at this just last night. Comes up on a "magic formula investing" screen. I like the fact that they don't have any debt, management does have some skin in the game, high REO, and a small divvy. What seems sorta out of whack is that the CEO and the CFO make hefty salaries in proportion to the companies size (correct me if I'm missing something). 

[johnny]

The big question with MLM's is how good the product is.

 

I'd say that is like maybe the third biggest question?