Why USANA Health Sciences, Inc. Shares Fell

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of USANA Health Sciences (NYSE: USNA  ) were getting banged up today, falling 10% after peer Nu Skin Enterprises (NYSE: NUS  ) plummeted 26% on an investigation into its practices by the Chinese government.

So what: The fellow multi-level marketing company took a hit on a pure tandem play here. Nu Skin shares have fallen nearly 40% in two days. First, the government's official newspaper said the company was "a suspected illegal pyramid scheme," and today, it announced an investigation into Nu Skin potentially distributing false information. The merit of the claims is questionable, as Nu Skin has been doing business in China for 11 years and already has "direct selling licenses." Nonetheless, the investigation is a major threat.

Now what: While Nu Skin derives half of its revenue from China, USANA sees nearly 60% of its revenue come from the world's No. 2 economy. Still, USANA hasn't experienced the skyrocketing growth in China that Nu Skin has lately, meaning that it is less likely to catch the ire of the ruling party. I don't see any meaningful long-term concerns for investors here.

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Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

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Related Tickers

8/28/2015 12:59 PM
NUS $45.13 Down -0.03 -0.07%
Nu Skin Enterprise… CAPS Rating: **
USNA $145.90 Down -3.02 -2.03%
USANA Health Scien… CAPS Rating: *