USANA Health Sciences

Our most recent addition to the portfolio has only been open for a few days, so there isn’t much more to say about since last week’s alert. We bought USANA Health Sciences (USNA) a week after its stock split 2 for 1, and so far its share price continues to hover around the $60 mark.

I believe that’s going to change soon, once the company’s newly appointed CEO begins implementing changes. Until two weeks ago, he shared that title with another co-CEO who just retired, paving the way for a more streamlined management structure. Historically, buying into a stock during such a transition period often yields outsized results in the months that follow as analysts revise future revenue estimates to the upside.

The three Wall Street investment banking firms that follow USNA have an average one-year price target of $80 on the stock, which represents a 33% gain over its current value. A pricing discrepancy of that magnitude is rare and usually indicates a disconnect between a stock’s theoretical value and its current trading dynamics. Given its very high degree of institutional ownership, this stock could turn on a dime once its technical trading data has been adjusted for the recent stock split.

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