Prescott Group’s Favorite Consumer Stocks for Q3; Direct Selling Companies among Top Picks

#2. Nu Skin Enterprises Inc. (NYSE:NUS)

– Number of shares owned by Prescott as of June 30: 250,118

– Aggregate value of Prescott’s holding as of June 30: $11.55 Million

The asset manager run by Phil Frohlich increased its exposure to Nu Skin Enterprises Inc. (NYSE:NUS) by 134,856 shares during the second quarter to 250,118 shares. The reshuffled stake was valued at $11.55 million on June 30, constituting 2.8% of the fund’s portfolio. The direct selling company that develops and distributes premium-quality personal care products and nutritional supplements has seen its market value jump by 34% since the start of 2016. The maker of personal care products has been previously accused of operating an illegal pyramid scheme in China, prompting a government investigation and resulting in a fine of $500,000. Although Herbalife Ltd. (NYSE:HLF), another multi-level marketing company, has not been called a pyramid scheme by the Federal Trade Commission, the restrictions Herbalife agreed to as part of its settlement with the FTC may dramatically slow down growth for the entire direct selling industry. Ray Carroll’s Breton Hill Capital increased its position in Nu Skin Enterprises Inc. (NYSE:NUS) by 20% during the second quarter to 21,361 shares.

#1. Nature’s Sunshine Prod. (NASDAQ:NATR)

– Number of shares owned by Prescott as of June 30: 1.87 Million

– Aggregate value of Prescott’s holding as of June 30: $17.78 Million

Nature’s Sunshine Prod. (NASDAQ:NATR) was the third-largest holding in Prescott Group Capital Management’s pool of holdings at the end of June, accounting for 4.3% of the hedge fund’s portfolio. The 1.87 million-share stake did not suffer any adjustments during the second quarter and was valued at $17.78 million on June 30. The natural health and wellness company engaged in the direct selling of nutritional and personal care products has seen the value of its stock gain 10% thus far in 2016. The company’s first-quarter net sales decreased by 1.8% year-over-year to $82.40 million. Nature’s Sunshine Products net sales in Russia, Central and Eastern Europe decreased a disturbing 14.7% in the first quarter. Sales in this region are anticipated to be affected by political unrest in Ukraine and Russia, sanctions against Russia, as well as the meaningful impact of currency devaluation. Nelson Obus’ Wynnefield Capital had 2.11 million shares of Nature’s Sunshine Prod. (NASDAQ:NATR) among its holdings at the end of the first quarter.

Disclosure: None