Deustche Bank Talks Direct Selling Industry after Fortune Hi-Tech Marketing Takedown (AVP) (HLF) (NUS)

January 29, 2013 3:16 PM EST Send to a Friend
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Analysts at Deustche Bank offered commentary on the direct selling industry after speaking to several direct selling CEO's in the wake of the FTC pronouncement against Fortune Hi-Tech Marketing on Monday.

1. The US Direct Selling Association denied Fortune Hi-Tech Marketing membership after reviewing the company's business model, showing that the DSA, of which Avon (NYSE: AVP), Nu Skin (NYSE: NUS), Herbalife (NYSE: HLF) and most others are members, is a qualified self regulatory organization that is doing its job in weeding out those with questionable regulatory practices and ensuring codes of conduct set for itself and regulators are being followed within the letter and the spirit of the law.

2. CEOs are not taking the recent allegations against their business models lightly and seem to have the resolve to increase transparency and embrace regulatory agencies and all investors to counter the skepticism.

3. By and large, broad industry fundamentals are healthy and growing by most measures with sales and margin acceleration likely in 2013 for most major players..

"Avon (NYSE: AVP) and Nu Skin (NYSE: NUS) remain two of our top picks in 2013, with solid growth prospects and compelling valuation at the latter and nascent signs of turnaround progress off very undemanding top and bottom line expectations for the former," the firm said. "In a broader consumer staples group where valuations are extended relative to growth, investors should start to flock to the more more volatile turnaround stories."

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DSA is not a regulatory body
assddfgh123 on 2013-01-30 07:58:04
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Direct Selling Association is a multi-level-marketing lobby and nothing else.

Also, please don't mix up MLM and direct selling: it's quite a difference to sell magazine subscriptions door to door than building a MLM organization to sell potions and lotions.

Dav on 2013-02-26 23:05:43
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Man you are a real idiot. You don't know shit about direct selling or mom.

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