Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>The WTR Consumer Index underperformed the S&amp;P SmallCap 600 in 2025, declining 10.6% versus an increase of 4.2% for the broader index. </li><li>The 4.6% increase in prospective earnings for our index was more than offset by a 2.6x contraction in its prospective P/E ratio to 15.5x from 18.1x at the beginning of the year.</li><li>Conversely, prospective earnings for the S&amp;P SmallCap 600 declined 2.5% in 2025, but that was more than offset by a 1.1x expansion of its prospective P/E ratio to 16.7x from 15.6x at the beginning of the year.</li></ul>

The WTR Consumer Index underperformed the S&amp;P SmallCap 600 in 2025, declining 10.6% versus an increase of 4.2% for the broader index. The 4.6% increase in prospective earnings for our index was more than offset by a 2.6x contraction in its prospective P/E ratio to 15.5x from 18.1x at the beginning of the year.Conversely, prospective earnings for the S&amp;P SmallCap 600 declined 2.5% in 2025, but that was more than offset by a 1.1x expansion of its prospective P/E ratio to 16.7x from 15.6x at the beginning of the year.

Consumer Monthly : WTR Consumer Index Lags Broader Market in 2025 - 12 January 2026

<ul><li>While our potential universe includes a broad range of branded consumer companies across the market capitalization, one corner of that universe that we have done a lot of work on over the years involves those companies utilizing a direct selling business model, which deploys a sales force of independent contractors to get their products in the hands of consumers.</li><li>The top trend we are monitoring for 2025 is the impact that the burgeoning market for GLP-1 drugs has on the weight loss stocks.</li><li>Two pure-play weight- loss names we monitor, MED and WW, have already been severely affected by the disruption caused by the GLP-1 drugs and have been on the defensive in recent years.</li></ul>

While our potential universe includes a broad range of branded consumer companies across the market capitalization, one corner of that universe that we have done a lot of work on over the years involves those companies utilizing a direct selling business model, which deploys a sales force of independent contractors to get their products in the hands of consumers.The top trend we are monitoring for 2025 is the impact that the burgeoning market for GLP-1 drugs has on the weight loss stocks.Two pure-play weight- loss names we monitor, MED and WW, have already been severely affected by the disruption caused by the GLP-1 drugs and have been on the defensive in recent years.

2025 Outlook: Focus Is on Top Line - November 13, 2024

<ul><li>Direct selling as a business model has a large global presence.</li><li>According to the World Federation of Direct Selling Associations (WFDSA), approximately 77% of global direct sales were conducted outside the US in 2022.</li><li>Therefore, foreign currency exchange rates can have a significant impact on reported earnings and cash flows for the dollar-based direct selling platforms, such as NUS, HLF, USNA, and LFVN.</li></ul>

Direct selling as a business model has a large global presence.According to the World Federation of Direct Selling Associations (WFDSA), approximately 77% of global direct sales were conducted outside the US in 2022.Therefore, foreign currency exchange rates can have a significant impact on reported earnings and cash flows for the dollar-based direct selling platforms, such as NUS, HLF, USNA, and LFVN.

Direct Sellers - Currency Outlook Remains Mixed

<ul><li>This year marks the fifth year in the most current downcycle for the stocks we monitor in the direct selling channel, with the brief exception of the pandemic-related benefits they reaped in 2H20 and 1H21, as a result of their product focus on health and wellness as well as their direct-to-consumer business models during the widespread lockdowns.</li><li>Even those benefits have been mostly given back in 2022 and 2023 as consumers moved from spending on goods for the home and body to services and experiences as mobility returned to the global marketplace</li><li>Below are the five key trends we are looking for to drive this group in 2024.</li></ul>

This year marks the fifth year in the most current downcycle for the stocks we monitor in the direct selling channel, with the brief exception of the pandemic-related benefits they reaped in 2H20 and 1H21, as a result of their product focus on health and wellness as well as their direct-to-consumer business models during the widespread lockdowns.Even those benefits have been mostly given back in 2022 and 2023 as consumers moved from spending on goods for the home and body to services and experiences as mobility returned to the global marketplaceBelow are the five key trends we are looking for to drive this group in 2024.

2024 Trends for Direct Sellers - Looking for an Inflection Point

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>In today's report we highlight key levels and several metrics we are watching that will provide us clues as to where the S&amp;P 500 is headed next. We also highlight several attractive stocks from a relative strength perspective across Sectors.</p>

In today's report we highlight key levels and several metrics we are watching that will provide us clues as to where the S&amp;P 500 is headed next. We also highlight several attractive stocks from a relative strength perspective across Sectors.

U.S. Equities: Upside Momentum Lost, But Not Breaking Down

United States

USANA Health Sciences, Inc. develops, manufactures, and markets nutritionals, personal care, and weight management products.  The Company's products are sold directly to preferred customers and distributors throughout the United States, Canada, Australia, New Zealand, the United Kingdom, and Hong Kong.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Usana Health Sciences (USNA US)

Consumer Monthly : WTR Consumer Index Lags Broader Market in 2025 - 12 January 2026

The WTR Consumer Index underperformed the S&P SmallCap 600 in 2025, declining 10.6% versus an increase of 4.2% for the broader index.

Water Tower Research

2025 Outlook: Focus Is on Top Line - November 13, 2024

The top trend we are monitoring for 2025 is the impact that the burgeoning market for GLP-1 drugs has on the weight loss stocks.

Water Tower Research

Direct Sellers - Currency Outlook Remains Mixed

According to the World Federation of Direct Selling Associations (WFDSA), approximately 77% of global direct sales were conducted outside the US in...

Water Tower Research

2024 Trends for Direct Sellers - Looking for an Inflection Point

This year marks the fifth year in the most current downcycle for the stocks we monitor in the direct selling channel with the brief exception of...

Water Tower Research

U.S. Equities: Upside Momentum Lost, But Not Breaking Down

In today's report we highlight key levels and several metrics we are watching that will provide us clues as to where the S&P 500 is headed...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)