Shares of Herbalife (HLF) have been flying-high since I sold the stock last December. The combination of solid results (which the company always had) and a short-squeeze has pushed the stock from the $20s late last year to $66 this quarter. So let’s see what the stock looks like now.
One Year Chart
Profit growth has been at least 20% in each fo the last four quarters. That’s good, because I thought HLF would lose salesmen with the bad press, and then that would lead to profits that would come in less than expected. Business remains great, although Estimates look a little light but HLF has crushed estimates the last two quarters.
HLF has a P/E of 13 which would normally be good considering this company has an expected Long Term Growth Rate of 15%. But this situation is different.
Fair Value
I know the P/E of 13 sounds reasonable, but stocks with partner (employee) compensation systems like this often get low P/Es of between 10 and 14. The P/E of 13 makes HLF a little high, but estimates are rising so I may have to raise this Fair Value next quarter.
Sharek’s Take
I’m not really interested in HLF. I just want to keep the charts and tables updated. The numbers show HLF is a little high right now.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
