Mon, Jan. 5, 4:34 PM
- Today's sell-off wasn't kind to Herbalife (NYSE:HLF) as it dropped 12% on a 67% spike in volume. Shares have plummeted more than 60% over the past year.
- The company's fundamentals continue to deteriorate. Sales growth, earnings and cash flow from operations have all slowed. Guidance has also weakened. Updated 2014 numbers are: volume point growth: 2.7 - 3.5% from a high of 8 - 10%; net sales growth: 3.5 - 4.3% from a high of 10 - 12%; diluted EPS: $5.80 - 5.90 from a high of $6.17 - 6.32.
- 2015 Guidance: volume point growth: 0 - 3%; net sales growth: -1 - 2%; diluted EPS: $5.45 - 5.75.
- Zacks Investment Research downgraded the company on December 30 to Strong Sell based on its lower-than-expected Q3 results and weaker outlook.
Nov. 4, 2014, 12:44 PM
Nov. 4, 2014, 9:15 AM
Nov. 4, 2014, 6:59 AM| 2 Comments
Nov. 3, 2014, 5:38 PM
Oct. 20, 2014, 9:01 AM
- At last report, Herbalife's (NYSE:HLF) biggest sell-side bull had exited DA Davidson and was rumored to maybe be joining Bill Stiritz who was then musing about an LBO of the company.
- Now at Pivotal Research, Tim Ramey starts Herbalife with a Buy and price target of $110. "If our job as analysts is to assess risk, quantify upside, and understand the downside, there is perhaps no better example of 'alpha' in the stock market today than Herbalife."
- Shares +2.75% premarket
Oct. 7, 2014, 2:35 PM
- Herbalife (HLF -2.7%) has been under investigation for months about whether it's operating as an illegal pyramid scheme, and senior executives at the company, tell Fox News it's a near-certainty the company will avoid the death penalty, though some action - perhaps a mix of fines and sanctions - remains a distinct possibility.
- Herbalife insiders note the FTC - when it sees illegal multi-level marketing schemes at work - has moved quickly to shut a number of them in recent years. The fact that no action has yet been taken gives the executives another level of confidence the company will survive.
Sep. 22, 2014, 3:50 PM
Aug. 27, 2014, 11:30 AM| 33 Comments
Jul. 29, 2014, 9:08 AM
Jul. 29, 2014, 8:25 AM
Jul. 28, 2014, 5:36 PM
Jul. 22, 2014, 1:05 PM
- Shares of Herbalife (HLF +14.8%) pop on a 5x surge in volume after investors regain confidence that the company "ain't done yet." In this morning's webcast, Mr. Ackman presented the findings of the investigation into the firm's Nutrition Clubs (NC) that Pershing Square sponsored. Unfortunately for shorts, there was little new information that would portend a collapse of the company. The investigative team looked into > 240 Nutrition Clubs in the U.S., Mexico and six other countries. There are > 37,000 NCs in Mexico that account for 75% of HLF's business in that country. Latinos figure prominently in Herbalife's growth.
- Investigative reporter-cum-analyst Christine Richard was the person who gave Mr. Ackman the idea of shorting Herbalife. She led the investigative effort into the NCs. She says that the clubs make money via the "certification" process for aspiring NC owners. They work for free, must consume and pay for product each time they report to a club and must deliver at least 10 repeat customers to the teaching club before they are allowed to open their own. The total investment is ~$3,000 which is similar to the initial investment in inventory for Supervisor status, it's just spread out over time. Mr. Ackman asserts that the NCs use deceptive tactics and violate labor laws by forcing people to work for free.
- According to the company, 33 - 41% of its earnings are derived from NCs. If they were to be shut down (by government action) the company would face a catastrophic collapse. Mr. Ackman believes the proportion is as high as 50% of earnings. He admitted that Canada is the only government that has looked into the situation thus far.
- As a crowning touch at the end of presentation and prior to the Q&A, Mr. Ackman called Herbalife CEO Michael Johnson a predator and a criminal. He then got emotional as he described his immigrant ancestors' pursuit of the American Dream. Regrettably, the camera didn't pan the audience to see how many members were teary-eyed as well.
Jul. 22, 2014, 12:47 PM
Jul. 21, 2014, 3:46 PM
- The softness of Herbalife (HLF -11.3%) shares continues as the end of the trading day approaches. Shares are down on a 4x surge in volume.
- In an attempt to set the tone for tomorrow's webcast by Pershing Square, the company issues a press release about its Nutrition Clubs. The bullets address the qualitative advantages/benefits for members but do not address the financial details, an area that was most certainly the focus in Mr. Ackman's investigation.
Jul. 21, 2014, 1:49 PM
- Shares of Herbalife (HLF -6.2%) tank on a 2x surge in volume ahead of tomorrow's webcast at 10:00 am EDT by Bill Ackman's Pershing Square Capital Management. Mr. Ackman et al. will be presenting their findings from their investigation into the company's Nutrition Clubs.
- Interested persons may access the presentation via www.HerbalifePyramidScheme.com.
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