John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Mannatech Is Overlooked, Undervalued And Turning Around

Key takeaways

  • Mannatech (NASDAQ:MTEX) trades at a ~4x EBITDA multiple due to a lack of analyst coverage, residual concern from the Herbalife battle with Ackman and a history of declining revenue.
  • However signs of a turnaround due to new products, cost cutting and an updated incentive arrangement are driving significant free cash flow growth and margin expansion.
  • Moreover, MTEX has no debt (excluding a minimal amount of capital lease obligations), net cash that accounts for ~41% of the market cap, high insider ownership and recent insider buying.

Company overview

MTEX sells health, weight and fitness as well as skin care products through 239,000 independent sales associates in 24 countries. Revenue is generated from the sale of individual products,...

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