| Stock (Symbol) | Stock Price | |
Herbalife (HLF) |
$69 |
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| Data is as of | Expected to Report | Sector |
December 14, 2010 |
Feb 21 |
Food & Beverage |
| Sharek’s Take | ||
 Herbalife keeps churning ahead. The company makes nutritional supplements that are distributed around the world.Once considered a 12-14% grower, Herbalife is growing rapidly because of its Independent Distributor model.People wishing to start their own business can sell nutritional shakes from home of a small store. Herbalife has gone from $55 to $69 since I purchased the stock for clients on August 3rd. Although the stock’s up, the P/E’s only risen from 12 to 13 so the stock is basically just as cheap as it was. HLF continues to be one of my top-ten investments and has the ability to take its P/E from 13 to 20, which would be a 50% move higher from here. |
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| One-Year Chart | ||
 In the one-year chart the Estimatesshow teens growth coming, but HLF has been beating estimates all year. With the stock well past the last breakout of $53, I can’t recomend investors make a big investment in HLF at this moment, the stock could correct. |
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| Earnings Table | ||
 Herbalife’s profits were up 38%, which is really great. The company had revenue growth of 15% last quarter, down from 21% from a year ago. HLF doesn’t have to have great revenue growth for profits to plow higher as profit margins run around 80%.HLF beat the street by 14 cents last quarter, but pounded estimates by 38 cents two quarters ago. I think the stellar momentum slowed a bit this quarter. Annual Estimates rose, but not as much as last quarter. Last quarter 2011 estimates rose 55 cents, this time they rose 36 cents — still great but not stellar. Future quarters show teens growth ahead, but these estimates are rising. |
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| Fair Value | ||
 Retail & Restaurants is the strongest sector right now. HLF could churn higher until the P/E hits 20. |
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| Ten-Year Chart | ||
 HLF has always shown it can grow profits fast, the street just never paid attention before. In 2008 the stock tanked as the poor economy made profits fall 7% in 2009. Still that’s not a big deal.HLF’s been on a solid roll lately, like many other stocks, so you could see a correction in early 2011. But with a P/E of only 13, the downside is extremely limited if the company doesn’t warn. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
5 of 18 |
Understand Herbalife is expanding globally with a solid business plan that is the best-thing-going in many countries that have high barriers to entry for people to start retail operations. Additionally, Herbalife has some of the best profit margins of any company anywhere. This could be the next Tupperware or Avon — and you can buy the stock for only 13 times earnings. HFL is the 5th best stock in the 18 stock Growth Portfolio Power Rankings, and also the 5th best stock in the 10 stock Aggressive Growth Portfolio Power Rankings. Right now the only things I own which are better are Apple (AAPL), Baidu (BIDU), Priceline (PCLN) and for safety/dependability purposes Express Scrpits (ESRX). |
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Aggressive Growth Portfolio
5 of 10 |
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