Why USANA Shares Soared

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 have gained 10%, after rising throughout the day, in response to a strong earnings report and positive forward guidance.

So what: USANA reported fourth-quarter revenue of $168.5 million, and earnings of $1.27 per share, both results beating analyst expectations of $165.6 million, and $1.21 per share. Operating cash flow was also strong, with a $29.2 million result. The company offered guidance for the upcoming year of $700 million to $720 million in annual revenue, and adjusted 2013 EPS of $5.10 to $5.25. USANA's EPS guidance came in well in advance of the $4.84 that Wall Street was looking for, and the Street's top-line projection of $701.6 million hit the low end of the company's guidance range.

Now what: USANA's results offer a firm rebuttal to the bear attack led by Bill Ackman on fellow multilevel marketing company Herbalife that sank many stocks in the sector at the end of last year. USANA is enjoying its best growth in China and Southeast Asia, where a 17.4% rise in the number of active Associates drove 21.3% greater sales. The company has nearly 60% of its float shorted at the moment, which could result in further short squeezes in the near future -- but it's also bound to make this stock volatile in either direction. Are you ready for a wild ride?

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The article Why USANA Shares Soared originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.The Motley Fool has the following options: Long Jan 2014 $50 Calls on Herbalife Ltd.. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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