| Stock (Symbol) | Stock Price | |
Herbalife (HLF) |
$58 |
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| Data is as of | Expected to Report | Sector |
August 5, 2011 |
Nov 2 |
Food & Beverage |
| Sharek’s Take | ||
 Herbalife is on a nice run higher, as business is really cookin — in a healthy way. Herbalife sells its products through an Independent Distributor model, which makes it easy to own a business in underdeveloped nations because of the solid international business model. In last quarter’s earnings release the CEO mentions “…as Herbalife helps consumers tackle the global issues of obesity”. These products are healthy and carry high profit margins. Last quarter, the Asia Pacific region had sales growth of 31%. Mexico 26% and China 25%. North America was 14%.
HLF stock isn’t under the radar anymore, people know about it. The stock’s P/E has gone from 12 to 19 since last year. Its still a good value, but the P/E of 12 really took away a lot of downside risk. |
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| One-Year Chart | ||
 Herbalife’s got an estimated Long Term Growth Rate of 15%. Recent growth has been much faster. I think analysts underestimate this company.
Profit growth was supposed to be 23% last quarter, and the company came through with 44% growth. Estimates have shown “slowing growth” for the last year and HLF’s done much better. |
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| Earnings Table | ||
 Sales were up 28% last quarter, 29% 2QtrsAgo and 17% 3QtrsAgo. Profit growth has been over 40% for the second straight quarter (when sales growth took off).
HLF’s been lights out when it comes to beating the street. The company ups and beats. This is one of the reasons this is one of the 20 best stocks in the market. Annual Profit Estimates have been climbing all year. The only bad thing is growth in 2012 and 2013 doesn’t look as good as this year’s. Quarterly estimates usually show slowing growth ahead. I don’t know why analysts think this is a 12% to 15% grower. |
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| Fair Value | ||
 Even after going from $27 to $58. HLF is still undervalued by 32%. Since profits are only expected to grow 16% next year, 2012 upside is good but not great. |
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| Ten-Year Chart | ||
 Herbalife’s ten-year chart was extended last quarter. This quarter the stock is basing because the market is in the midst of a crash/correction. Still, in the face of a market that’s taken the Dow from 12,100 to 11,400 the first five days of this month, HFL’s hung in there. The Stock’s $58 and the all-time high (set this month too) is $63.
If Herblife makes $3.40 this year (current estimate is $3.09), profits will be up 10x from 2004 — only seven years. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
3 of 20 |
Herbalife’s really cooking — especially overseas where the company has enormous potential in emerging markets where its a solid retail concepts that can get product delivered. HLF is 3rd in the 20 stock in the Growth Portfolio Power Rankings and 4th in the 11 stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
4 of 11 |
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