Herbalife (NYSE:HLF) sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products worldwide.
Insider selling during the last 30 days
Here is a table of Herbalife's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Option Exercise & Sale||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Patricio Cuesta||SVP||June 18||2,975||No||Yes||8,643
shares + 63,536 options
|Richard Bermingham||Director||June 13||16,000||Yes||Yes||24,753
|John Tartol||Director||May 21||50,000||No||No||235,573 shares + 12,110 options||16.8%|
There have been 68,975 shares sold by insiders during the last 30 days. Patricio Cuesta, and Richard Bermingham sold their shares pursuant to a Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of Herbalife's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 332,290 shares sold and there have been 2,984,849 shares purchased by insiders since January 2013. The month of May 2014 has seen the most insider selling.
Herbalife reported the first-quarter financial results on April 28 with the following highlights:
|GAAP net income||$74.6 million|
The three insiders sold their shares after these results.
Herbalife's guidance is as follows:
|Net sales growth vs 2013||10.0%-12.0%||10.0%-12.0%|
|Qtrly Rev Growth (yoy):||0.12||0.02|
|PEG (5 yr expected):||0.55||0.82|
Herbalife is trading at a similar P/S ratio than GNC. In GNC, there have not been any insider selling since November 2013.
There have been three different insiders selling Herbalife, and there have not been any insiders buying Herbalife during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Herbalife has an insider ownership of 17.98%.
Before going short Herbalife, I would like to get a bearish confirmation from the Point & Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.