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A global network marketing company that sells weight management, nutritional supplement and personal care products.
Things about to get interesting at Herbalife: After Big Bet, Hedge Fund Pulls the Levers of Power (Staking $1 Billion That Herbalife Will Fail, Then Lobbying to Bring It Down)http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will-fail-then-ackman-lobbying-to-bring-it-down.html?smid=fb-share
recent news has been bad, w/ Senator Markey calling it a Ponzi scheme and all. But for the deep value investor this is just grist for the mill. HLF is selling at a EV/EBITDA of 3.7, ROIC & ROE are both over 100%. There is a lot of debt, but w/ cash flow growing at > 24%, interest should be easily covered. I think this is a steal at current prices.
I think it was oversimplified to say there were no "material" differences or reasons for restatement. And I'm not a fan of management that's not 100% open and honest about what's going on.
Simply put Bill Ackman provided a wonderful buying opportunity in a wonderful company. The company is currently artificially "on sale". Over the next few years slowly I would look for the negative sentiment and hope to die away from lack of anything tangible and the stock to slowly be priced appropriately.
Just because you like the product doesn't make the company a good investment.Likewise, just because I believe HLF is a pyramid scheme doesn't make it a good short. HLF has millions in cash flow to buy back shares, lobby in DC, and entice influential people to sit on its board. And if HLF is taken to court, it can hire the best lawyers. Shorting a stock is as hard as knowing when it's time to sell a former long position.In the end, however, HLF is an artfully cloaked pyramid scheme. I wish nothing but the worst for this company and the people who run it (the one percent at the top).
Now that the re-audit is done and there were no restatements, and the fervor over Bill Ackman's short from late 2012 is mostly in the rear view mirror, I think Herbalife's value will now be weighed by the company's business model going forward -- which stinks. The stock may look cheap, and buybacks and dividends will help, but I see this as an underperform for at least the next few years.
seriously... seriously. this is a no brainer
Icahn will be getting out soon, and then its all down from there
Yes, I think it is a pyramid scheme. And I never liked Carl Icahn, although I'm a little nervous to bet against him.
BRITAN had not listed this stock because they thought it was a pyramid scheme . It was tested in the British courts and found not to be a scheme but a viable product and is now listed on the FTSE increasing the demand to buy the stock. Today is a pull-back and a great opportunity to buy.
Stepping in front of story stock trains has been some of my toughest calls in CAPS. Even though I personally can't stand the MLM business model and feel they're all pyramid schemes hiding behind obtuse legal definitions I cashed in my first HLF red thumb after a modest gain afraid that the FTC and other regulators will ultimately keep their eyes blind to the fact that no one buys HLF's products except dupes looking to get rich quick on the "business opportunity". Self consumption is horse manure but whether regulators care is the binary question to the bull vs. bear case for HLF. An S.A. article pointing out that a judge in a court case has allowed a case to proceed that is based on a challenge to the companies self consumption argument and that the SEC has offered a new definition of pyramid scheme excluding self consumption from legitimate retail sales gives me reason to re-up my red thumb.
Legal risks still there long-term.Ackman now in OTC options, won't give up crusade:http://www.bloomberg.com/news/2013-10-03/pershing-s-ackman-moves-to-soften-risk-on-herbalife-pyramid-bet.html
It may take Ackman years to turn out right.
This company is aggressively purchasing its own shares. Although I am not too happy about the fight between some notable investors.
Multi-level marketing is not a legitmate, economically viable business strategy for the long-term. Herbalife and other companies like it will all hit $0 at some point when people realize it's a scam.
What can I say? I enjoy watching billionaires have temper tantrums. Think of this stock like a version of a Wall Street soap opera. A Thurston Howell III cage match, if you will.
In Rio De Janiero I used to go to a weekly corner store where a bunch of old ladies would have their daily herbalife drinks ($2.50 for 3) and chat about their days. Pyramid scheme? Maybe. They all the ladies bought it, and many of them also sold Herbalife. Why is that a bad thing? It was a delicious drink that was also high in nutrients. I don't know why people hate on this stock without ever trying it or being involved with its model of business.
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