February 11, 2003  Email this 
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 License or reprint this articleNBTY: Low-Profile Performer
NBTY (NBTY) is the number one wholesaler and one of the largest vitamin and food supplement retailers in the U.S. and Europe. The company markets its products under the Nature's Bounty, Puritan's Pride and Vitamin World brand names and sells them through storefronts and catalogs. Sales have been rising steadily as the popularity of vitamins and natural therapies widens.
The February 10 issue of Dow Theory Forecasts spotlighted NBTY for its so-called "light-blue chip" qualities. In other words, it's a top-notch company that has market dominance and a track record of growth. Plus, it's trading at a value.
NBTY's December same-store sales rose 12% from a year ago and operating profit margins increased to 11.4% from 10.8%, despite stiff pricing pressure. The company also delivers a solid 14% return on assets and has more than $46 million in cash on the books.
Analysts at Dow Theory say NBTY's penchant for acquiring bankrupt competitors for pennies on the dollar will pay off in the long run. They see NBTY as a buy candidate for its ability to perform over the next 12 months. The stock trades at less than 14 times the 2003 consensus earnings estimate of $1.34 per share. Analysts expect 20% earnings growth, on average, over the next three to five years.
-- Elizabeth Frengel
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