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Multi-Level Marketing Stocks Get Hit Hard

Ackman, earnings and China are weighing down MLM stocks

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Multi-level marketing stocks are taking it on the chin in 2014. The top 10 companies by market cap are down an average of 15.2% year-to-date through Aug. 1 — 20 percentage points worse than the S&P 500.

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If you factor out the 58% gain from CVSL (CVSL) — the holding company that owns Longaberger, Your Inspiration at Home and several other direct selling concepts — the carnage is even worse.

Three things are conspiring against MLM stocks: Bill Ackman, earnings and China. The trio of items makes it incredibly tough for any of these businesses to gain momentum.

Is this latest series of events simply a cyclical downturn that hits every industry from time to time, or is there something else happening that is more permanent in nature … something that these stocks might not recover from?

Here’s a closer look at how each factor is weighing on MLM stocks:

Article printed from InvestorPlace Media,

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