| Stock (Symbol) | Stock Price | |
Herbalife (HLF) |
$46 |
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| Data is as of | Expected to Report | Sector |
September 25, 2012 |
Oct 29 |
Food & Necessities |
| Sharek’s Take | ||
 Herbalife got hammered last May after its business model was questioned during an earnings call. Here we are well into September and nothing bad has yet to surface. The shares deserve to go back where they were. The full story can be read here, and you can read last quarter’s HLF research report to get my opinion on the subject.So now we sit and wait — and make a 2.6% yield. Nice. This stock is really undervalued and the company keeps performing above expectations. I think its only a matter of time before HLF goes back to $70. |
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| One-Year Chart | ||
 During the past two years, HLF’s P/E has fluctuated between 12 and 20. I got HLF when the P/E was 12 (stock was $27 afters splits). Then I said it was close to Fair Value when the P/E was 19 and the stock was $66. |
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| Earnings Table | ||
 Profits increased 25% last quarter as sales rose a respectable 17%.Herbalife whipped estimates by 14 cents last quarter — it did much better than the 8 cent beat 2QtrsAgo. It gets better… Annual Profit Estimates continue to rise — each year’s rose around a quarter. Management said there si increasing demand in China. This showing should have silenced critics. Quarterly estimates increased and I think these will get beat. HLF should grow profits 25% for the foreseeable future. |
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| Fair Value | ||
 This stock has healthy upside — this one of my most attractive investments. |
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| Ten-Year Chart | ||
 Profit growth is expected to clock in at 20% this year, solid for a stock with a 12 P/E. That number is up from 14% last quarter. 25% growth is attainable. HLF needs to fill that gap down — and it has what it takes to do so. I can feel a move to $70 coming. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
10 of 16 |
Investors are fearful Herbalife’s business model is comparable to a pyramid scheme. If true, this would be bad for its business in China. But China doesn’t have a problem with HLF’s sales practices – neither does the SEC which did a review in 2007. Meanwhile business is strong. I’m a believer that HLF will rebound, and would be a buyer here. |
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Aggressive Growth Portfolio
8 of 8 |
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