HLF
Herbalife Ltd.
Consumer, Event Driven/Special Sit
06/07/2013
Presented
| Date | 06/06/2013 |
| Price | $42.80 |
| Market Cap | $4.41B |
| Ent Value | $4.66B |
| P/E Ratio | 9.64x |
| Book Value | N/A |
| Div Yield | N/A |
| Shares O/S | 102.96M |
| Ave Daily Vol | 2,910,000 |
| Short Int | 32.11% |
Current
| Price | $6.85 |
| Market Cap | $0.69B |
| Herbalife Ltd., a network marketing company, sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products worldwide. It offers science-based products in four principal categories, including weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. The weight management product portfolio includes meal replacement, protein shakes, drink mixes, weight loss enhancers, and healthy snacks. The targeted nutrition products comprise dietary and nutritional supplements containing quality herbs, vitamins, minerals, and other natural ingredients. The energy, sports, and fitness products consist of products designed to meet the nutritional needs of athletes, such as Herbalife24 product line, which enables athletes to customize their nutrition program based on personal training and competitive demands throughout the day. The outer nutrition products include skin cleansers, toners, moisturizers, facial masks, shampoos and conditioners, body-wash items, and a selection of fragrances for men and women, as well as anti-aging products. The company also sells literature and promotional materials, including ‘International Business Packs’, start-up kits, sales tools, and educational materials, as well as Internet based tools, such as BizWorks, a customizable retail Website for its distributors. Herbalife Ltd. offers its products through retail stores, sales representatives, sales officers, and independent service providers. The company was founded in 1980 and is based in Los Angeles, California. |
Highlights
Despite all of the controversy surrounding HLF’s business model, and the public battle between Carl Icahn and Bill Ackman, the presenter is bullish on shares of HLF and does not believe the FTC will take action against the company. HLF has relatively consistent 12%-15% revenue growth, 10%-12% operating income growth, no material capex needs, and minimal working capital requirements. He sees very little risk of the bears’ thesis on the company - which hinges on the company’s business model coming under fire from the FTC - coming to fruition.
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