+ Watch HLF
on My Watchlist
A global network marketing company that sells weight management, nutritional supplement and personal care products.
Because of the work culture of the company/s distributors
Is it a pyramid...is it a Ponzi...is it part of each...a Ponzimid...??Does Icahn know best with his billion invested (was a billion before 3PM today) or was/is Ackman right with his Billion dollar short?Is the FBI investigating...will it mean anything... "multilevel marketing company's business practices, including how it recruits new members into its distribution scheme"..... scheme??FTC warning...? One of about 30 links this evening:"http://finance.yahoo.com/news/fbi-conducting-probe-herbalife-source-211828041.html""The news comes roughly a month after Herbalife confirmed that the Federal Trade Commission had issued a civil investigative demand to the company to look more closely at how it works."Down 33% since January.I have no idea, the financials "look good". There are dividends and stock buybacks.P/B is still over 10, but margins "look strong".Growing internationally, rapidly in China.$1.5B of non-reoccurring revenue each year...sounds reoccurring to me....I'm not clear why they are borrowing AND paying dividend and buying back stock, but they could feel that the borrowing rate is low and the best value is the stock buyback.Balance sheet growing slowly...Goodwill and intangibles $400M.Accounts Payable $772M, seems high.Overall, no real neg. here, just checking in to see what our government dollars are buying.Short side (on caps) because of sentiment from the churn....and the 10X book...should be able to grow being international and all, but I wonder if the cost to entry, and reputation is starting to wear.
Cloudy weather will clear
Monkey says he likes it.
If it's an illegal pyramid of sorts, this stock is worth 0 bananas. If it's not, it's worth $120+ given it's exceptional cash flow. There are billions of dollars on each side of the debate, but Monkey's research says odds are 3:1 in favor of HLF being legit in all the ways that matter. So this is closer to roulette than it is to investing the honest American way (ha!) but the odds are way in your favor. Do you take the probabilities or do you sit on the sidelines? Monkey thinks within the next two years when the legal stuff has shaken out he'll be glad to have own a few option calls on this platypus of stocks.
10.75 times ttm earnings. 25+% annual growth rate. 2.25% yield and continual share repurchases.
It's a scam.
Investors should consider selling puts. You can achieve some very high annualized returns at strikes significantly below the current price. e.g.May 14 $40.00 strike at $2.40 has 28% discount and 37% annualized return.
FTC probe will kill this company.
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
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.
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.
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