| Stock (Symbol) | Stock Price | |
GNC Holdings (GNC) |
$46 |
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| Data is as of | Expected to Report | Sector |
May 22, 2013 |
July 22 – July 26 |
Retail & Travel |
| Sharek’s Take | ||
 GNC’s (GNC) new Member Price program will help sales and profits. The old Gold Card customer loyalty program gave a 20% discount the first week of the month. The new Member Price program takes 5% to 50% of every item, every day. This change will certainly help boost sales, the other was a pain in the ass for customers to keep up with. Also, te company is in a stock buyback program and will purchase $250 million worth of stock in the next 12 months. GNC has a $4 billion market cap, so that’s around 6.5% of shares. The stock also pays a dividend of 1.5%. I feel GNC has some of the best management of any stock in the market. I purchased the stock for clients at $33, its $46 this quarter, and is worth $56. |
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| One-Year Chart | ||
 GNC was undervalued when I bought it and its still undervalued even after this rise. The P/E is only 16. Notice in Estimates that profits are expected to climb only 13% next quarter. That’s due to costs associated with the new Member Price program. |
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| Earnings Table | ||
 Profit growth was 22% last quarter. Sales rose only 6% due to tough comparisons to the year ago period and an early Easter. Third-party sales (like the Rite Aid displays) rose 20%.GNC beat by a penny. I’m used to the company beating by more, and think it will again later in the year. Annual Profit Estimates stayed about the same as last quarter. Once the Member Price program gains steam, profit growth should push back over 20% a quarter. The company is also launching a record number of high-margin GNC brands in 2013. |
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| Fair Value | ||
 GNC has solid upside for this year and next. I got in GNC at $33 last year, and expect it to be $67 next year. |
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| Ten-Year Chart | ||
 The ten-year chart looks really good. Steady rise upward. So far, so good. All systems go. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
3 of 18 |
GNC should be a top-ten holding in every stock investor’s portfolio. It grows profits 20% a year, the stock is undervalued at 16 times earnings, the company pays a healthy dividend, and management buys back shares. GNC is ranked 3th in the 14 stock Growth Portfolio Power Rankings and 4rd in the 10 stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
4 of 10 |
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