Mark Luo
Long/short equity, Deep Value, contrarian, long-term horizon

How Usana Compares With Herbalife's Pyramid Scheme Allegations

As the short thesis on Herbalife (NYSE:HLF) is coming to fruition, Usana (NYSE:USNA) could very much be next. Like Herbalife, Usana sells commodity-like products at premium prices without any convincing reasons other than their recruiting activities. But unlike Herbalife where retail sales are elusive and the company assumes an arbitrary 50% suggested retail price (SRP), Usana's price list insists on a 20% SRP (aka recommended retail price) which makes it impossible for distributors to earn more income from retail sales than commission from their downlines (credit to LongShort 101). Honorable mentions to the short-thesis includes:

    Usana is currently under investigation by the SEC as executives were given stock-appreciation rights the day before favorable earnings...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details