Oh, Herbalife (HLF). You really let me down last year. Last spring HLF was around $70 (I paid around $26 for it) and the stock crashed late in the year due to shortselling concerns, forcing me to sell around $28.
This stock isn’t investable now. Its not trading on fundamentals but rather a tug-of-war with investors and short-sellers. Still, I want to look at the numbers.
One Year Chart
HLF is just shy of $40 now. The P/E is only 8, but I don’t feel this stock trades on fundamentals. Profit growth was 22% last quarter. That beat the street by 4 cents, which was great. I felt Herbalife would miss earnings estimates last quarter, thinking HLF salesman would back out of the program after it was called a pyramid scheme.
Estimates show teens growth coming the next four quarters. HLF usually beats the street and if it can continue to do so the company could put out 15% to !17% profit growth this year.
Fair Value
I think the stock is worth maybe 10 times earnings. HLF has good upside, but I wouldn’t invest here.
Sharek’s Take
I don’t think Herbalife is a good investment now because its really caught in a tug-of-war with deep-pocket investors who are swaying the stock price. Even if you get in and the stock goes up, the stock could drop back down at any time due to negative news.
View the Earnings Table here.View the Ten Year Chart here.
