Why Nu Skin Enterprises and B&G Foods Dropped Today

The blue chips bounced back today on strong earnings from Google and other major companies, but Nu Skin Enterprises and B&G Foods still finished lower.

Jul 18, 2014 at 10:00PM

After falling sharply yesterday on concerns about tensions in Ukraine, stocks bounced back today on some strong corporate earnings reports. For the day, the Dow Jones Industrial Average (DJINDICES:^DJI) finished up 123 points, or 0.7%, while the S&P 500 gained 1%, and the Nasdaq jumped 1.6%, propelled by Google, which finished 4% after reporting earnings last night. Both the Dow and the S&P closed the week near all-time highs, notching gains for the week.

International tensions escalated as President Obama warned Russia that stiffer sanctions may come if the Kremlin continues to support rebels in Eastern Ukraine, calling yesterday's attack on a Malaysian Airlines jet an "outrage." In Israel, meanwhile, Prime Minister Netanyahu ordered troops to prepare for a wider ground assault in Gaza, also raising concerns about the volatile region.

On today's economic docket, the University of Michigan reported that consumer confidence fell slightly, from 82.5 in June to 81.3, missing estimates of 84.0. While many other sectors of the economy, including the labor market and manufacturing, seem to be rocketing toward full health, consumer confidence has been unable to break out of the low 80s range that it's stayed in most of the year, as retail sales have been slower than expected. Consumers gave high marks for current economic conditions, but expectations remained low, which may be putting a damper on spending. 

Shares of Nu Skin Enterprsies (NYSE:NUS) were taking a hit, once again, falling 6%, after the company got a downgrade from neutral to underperform by Bank of America. The beauty-products maker's shares fell sharply earlier this year when the Chinese government announced an investigation into some of its hiring and sales practices, and today, B of A said there was little evidence of a potential turnaround. Nu Skin shares touched a 52-week low on the downgrade, having lost more than 50% this year, and now trades at a P/E of just 10. Sales had been growing dramatically in China, but the government investigation seems to have cooled investors' hopes for growth. Still, this could be an excellent buying opportunity if Nu Skin can bounce back in China.

Shares of B&G Foods (NYSE:BGS) also closed lower, falling 4% on a disappointing earnings report. The maker of shelf-stable food products posted a per-share profit of just $0.33 against estimates of $0.39, while revenue jumped 26%, to $202.9 million, thanks to several acquisitions during the past year. Organic sales increased just 1.1% in the quarter, however, as the company was hurt by lower prices, and gross margin fell 350 basis points to 31.1%, due to the pricing increase. Finally, the food supplier reduced its adjusted EPS guidance for the year, down from $1.59-$1.65 to $1.54-$1.60. While the company's attempts to diversify through acquisitions seem smart, and the stock pays a 4% dividend yield, the current consumer trend of buying more fresh foods may continue to pressure earnings going forward.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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