Wednesday, September 28, 2011

Natural Alternatives International, Inc. (NASDAQ: NAII) Q4 2011 Price Target

Recent price: 3.77$
P/E Ratio: 5.35
3 Months Target Price: 6$

Company Description
According to Reuters, Natural Alternatives International, Inc. is a formulator, manufacturer and marketer of nutritional supplements and provides strategic partnering services to its customers. The Company offers a range of nutritional products and services to its clients, including scientific research, clinical studies, ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management and support, packaging and delivery system design, regulatory review, and international product registration assistance. It provides private label contract manufacturing services to companies that market and distribute vitamins, minerals, herbs, and other nutritional supplements, as well as other health care products, to consumers both within and outside the United States. It develops, manufactures and markets its branded products under the Pathway to Healing product line.

Confidence Margins
Strong resistance $7.11 (+89%)
Light resistance $4.95 (+31%)
Light support $3.00 (-20%)
Strong support $2.50 (-34%)

Companies operating close to the healthcare industry are not viewed in a favorable manner by Wall Street lately. This provides investors with a good opportunity to invest in a company that is temporarily out of favor. Natural Alternatives International might just prove to be an excellent acquisition.

Entry strategy
For the cautious investor:
Buy the stock for 4$ or less.

For the risk-taking trader:
As the company has no publicly traded option contracts, the use of leverage might be the way to get some excess return on this position.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6$, or keep it until 7$ if you are more bullish in your own analysis.

For the risk-taking trader:
Same strategy as for the cautious investor.

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