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: Nutritional-supplement company Schiff Nutrition International
So what: It was a pretty phenomenal quarter for Schiff Nutrition, which reported 46% net sales growth, an 81% rise in year-over-year EBITDA, and gross-margin expansion of 240 basis points. Part of the growth was driven by its acquisition of Airborne, but the remainder came from strong branded growth. Schiff also handily raised its guidance for the remainder of fiscal 2013. Previously, the company had forecasted net sales growth of 40% to 43% and an operating margin of 12.5% to 14%. With its new forecast, Schiff projected net sales growth of 43% to 46% and an operating margin of 14.5% to 16%.
Now what: There's a lot to like about these results from Schiff, including its upped guidance and growing margins. If there's anything that would cause me to back off the stock, it's the valuation. Growth is getting a boost from the Airborne acquisition this year, but it will taper to an projected 9.5% next year, according to Wall Street estimates. That is, perhaps, a bit pricey for a company trading at 23 times forward earnings. If anything, Schiff is definitely a company worth adding to My Watchlist.
Craving more input? Start by adding Schiff Nutrition International to your free and personalized Watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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