Lane Research

Douglas Lane

Lane Research is a boutique fundamental equity research firm focusing on companies that employ a direct to consumer business model. This is an area where we have had extensive experience over the years, going back to the mid-1990s when Amway Asia Pacific, Amway Japan and Nu Skin originally listed on the New York Stock Exchange. We think Direct Selling in particular supports many favorable consumer macro-trends such as leveraging today’s technology to advance social selling and workplace flexibility, and the move towards shopping away from a fixed retail location. Our proprietary financial modeling coupled with our decades of experience and contacts within this unique business model leave us well positioned to provide alpha to investors interested in the space. Lane Research does not have any trading or investment banking operations, fully aligning our objectives with our clients.

Experience includes:

-9 equity analyst awards, including Starmine's #2 stock picker in 2011 for Household Durables & #1 earnings estimator in 2010 for Personal Products, and The Wall Street Journal's #1 stock picker in 2004 & 2006 for Household Products. 

-Financial TV appearances including CNBC and Bloomberg

-Quotes in financial publications such as Wall St Journal, Investors Business Daily and Barron's, and newswires such as Reuters and the Associated Press

-Chartered Financial Analyst since 1992 and member of the CFA Society Boston

-FINRA Series 7, 63, 86 & 87

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/15961" target="_blank" data-smartkarma-citation="entities:15961:1">Usana Health Sciences (USNA US)</a> reported 3Q EPS of $1.24, ahead of our $1.15 estimate and consensus of $1.12 on better than expected organic sales growth, which USNA was able to leverage at the operating income line given its relatively fixed SG&amp;A. Momentum Indicators accelerated further in the 3Q and the company raised its FY outlook.  Adverse currency moves mitigated the 3Q beat and FY raise, but clearly, the underlying business continues to gain traction.

Usana Health Sciences (USNA US) reported 3Q EPS of $1.24, ahead of our $1.15 estimate and consensus of $1.12 on better than expected organic sales growth, which USNA was able to leverage at the operating income line given its relatively fixed SG&amp;A. Momentum Indicators accelerated further in the 3Q and the company raised its FY outlook.  Adverse currency moves mitigated the 3Q beat and FY raise, but clearly, the underlying business continues to gain traction.

Usana Health Sciences: 3Q EPS Upside & FY Outlook Raised; Underlying Momentum Continues to Build

We recommend <a href="https://www.smartkarma.com/entities/15961" target="_blank" data-smartkarma-citation="entities:15961:1">Usana Health Sciences (USNA US)</a> as one of our top growth picks and believe the company has built up considerable momentum as the year has progressed driven by the launch of Celavive and increased production capacity in China.

We recommend Usana Health Sciences (USNA US) as one of our top growth picks and believe the company has built up considerable momentum as the year has progressed driven by the launch of Celavive and increased production capacity in China. 

Usana Health Sciences: This Week’s Earnings 2-Minute Drill

We hosted meeting with investors for <a href="https://www.smartkarma.com/entities/15961" target="_blank" data-smartkarma-citation="entities:15961:1">Usana Health Sciences (USNA US)</a> CFO Doug Hekking and EVP Legal Josh Foukas in Boston back in September.  The tone remained upbeat following the 2Q upside and FY raise, and ahead of the rollout of Celavive in China later this month.   We continue to expect that USNA will exit 2018 with considerable operating momentum.  Reiterate Buy rating.

We hosted meeting with investors for Usana Health Sciences (USNA US) CFO Doug Hekking and EVP Legal Josh Foukas in Boston back in September.  The tone remained upbeat following the 2Q upside and FY raise, and ahead of the rollout of Celavive in China later this month.   We continue to expect that USNA will exit 2018 with considerable operating momentum.  Reiterate Buy rating.

Usana Health Sciences (USNA): Highlights from Recent Investor Meetings; Tone Remains Upbeat

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

China is about ~20% of HLF global sales.  We have been stunned by the incredible disconnect between the stock’s incredible overperformance (~50% YTD, vs SPX down ~3%) vs. the structural deterioration of fundamentals in the company’s fastest growing market.  Financial engineering is a major source of the stock rally in our view.  However, buyback effectiveness is likely to diminish, and future stock performance will depend more on earnings growth not share buyback.  We believe that as the “celebrity” hedge funds exit the name; the fundamentals will become more important now than before.

China is about ~20% of HLF global sales.  We have been stunned by the incredible disconnect between the stock’s incredible overperformance (~50% YTD, vs SPX down ~3%) vs. the structural deterioration of fundamentals in the company’s fastest growing market.  Financial engineering is a major source of the stock rally in our view.  However, buyback effectiveness is likely to diminish, and future stock performance will depend more on earnings growth not share buyback.  We believe that as the “celebrity” hedge funds exit the name; the fundamentals will become more important now than before.   

Herbalife China: RMB Appreciation Tailwind for All MNCs; Fundamental Slowdown Irreversible

According to our surveys of <a href="https://www.smartkarma.com/entities/6216" target="_blank" data-smartkarma-citation="entities:6216:1">Herbalife Ltd (HLF US)</a> China distributors, we estimate that volume points declined by ~25% and ~10% year-over-year in Q1 2018.   (Exhibit 1 &amp; 2) Latest corporate developments:<ol><li>Cash bonus to distributors who -achieve VP targets, to prevent a collapse of sales, at the expense of profit margin.  This is the first time ever that HLF China has adopted a cash bonus policy.  The program was effective on Feb 1st and is set to expire on June 30th (5 months).  The expiration…</li></ol>

According to our surveys of Herbalife Ltd (HLF US) China distributors, we estimate that volume points declined by ~25% and ~10% year-over-year in Q1 2018.   (Exhibit 1 &amp; 2) Latest corporate developments:Cash bonus to distributors who -achieve VP targets, to prevent a collapse of sales, at the expense of profit margin.  This is the first time ever that HLF China has adopted a cash bonus policy.  The program was effective on Feb 1st and is set to expire on June 30th (5 months).  The expiration…

Herbalife China: Q1 VP Down ~25% YoY, New Cash Bonus Policy to Retain Distributors

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.

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Usana Health Sciences (USNA US)

Usana Health Sciences: 3Q EPS Upside & FY Outlook Raised; Underlying Momentum Continues to Build

Usana Health Sciences (USNA US) reported 3Q EPS of $1.24, ahead of our $1.15 estimate and consensus of $1.12 on better than expected organic sales...

Douglas Lane

Usana Health Sciences: This Week’s Earnings 2-Minute Drill

We recommend Usana Health Sciences (USNA US) as one of our top growth picks and believe the company has built up considerable momentum as the year...

Douglas Lane

Usana Health Sciences (USNA): Highlights from Recent Investor Meetings; Tone Remains Upbeat

We hosted meeting with investors for Usana Health Sciences (USNA US) CFO Doug Hekking and EVP Legal Josh Foukas in Boston back in September. The...

Douglas Lane

Herbalife China: RMB Appreciation Tailwind for All MNCs; Fundamental Slowdown Irreversible

China is about ~20% of HLF global sales. We have been stunned by the incredible disconnect between the stock’s incredible overperformance (~50%...

JL Warren Capital

Herbalife China: Q1 VP Down ~25% YoY, New Cash Bonus Policy to Retain Distributors

According to our surveys of Herbalife Ltd (HLF US) China distributors, we estimate that volume points declined by ~25% and ~10% year-over-year in...

JL Warren Capital

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