Herbalife (HLF) has a market cap of $5.5 billion. It rose by 9.9% to close at $65.25 per share on July 15, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 6.9%, 10.2%, and 21.7%, respectively, on the same day. HLF is trading 10.2% above its 20-day moving average, 8.7% above its 50-day moving average, and 16.7% above its 200-day moving average.
Related ETFs and peers
The PowerShares Dynamic Market Portfolio ETF (PWC) invests 0.51% of its holdings in Herbalife. The ETF tracks a quant-selected, tier-weighted index covering the entire US equity market. The YTD price movement of PWC was 2.1% on July 15.
The iShares Russell 3000 ETF (IWV) invests 0.02% of its holdings in Herbalife. The ETF tracks a cap-weighted index that measures the investable US equities market, covering the entire market-cap spectrum, including micro-caps.
The market caps of Herbalife’s competitors are as follows:
Latest news on Herbalife
In a press release on July 15, 2016, Herbalife reported, “Global nutrition company Herbalife (HLF) announced it has reached a settlement agreement with the FTC (Federal Trade Commission) resolving the FTC’s multi-year investigation of the company. The terms of the settlement do not change Herbalife’s business model as a direct selling company and set new standards for the industry.”
Under this agreement, the investigation of Herbalife is complete. It also noted that “Herbalife and the Illinois Attorney also reached a settlement, and the company agreed to pay $3 million as part of this separate agreement.”
Performance in 1Q16
For 1Q16, Herbalife reported net sales of $1.12 billion—a rise of 1.3%, as compared to net sales of $1.10 billion in 4Q15. The company’s gross profit margin and operating income rose by 0.50% and 24.1%, respectively, in 1Q16 over 1Q15.
Its net income and EPS (earnings per share) rose to $95.8 million and $1.12, respectively, in 1Q16, as compared to $78.2 million and $0.92, respectively, in 4Q15.
In 1Q16, Herbalife’s cash and cash equivalents fell by 13.0%, and its inventories rose by 1.4% over 4Q15. Its current ratio fell to 1.2x in 1Q16, as compared to 1.5x in 4Q15.
Herbalife made the following projections for 2Q16:
- volume point growth of 1.5%–4.5%
- net sales growth of 0.0%–3.0%
- adjusted EPS of $1.10–$1.20
- capital expenditure of $65.0 million–$75.0 million
- currency adjusted net sales growth of 5.5%–8.5%
- currency adjusted EPS of $1.30–$1.40
The company made the following projections for 2016:
- volume point growth of 2.0%–5.0%
- net sales growth of 1.5%–4.5%
- adjusted EPS of $4.40–$4.75
- capital expenditure of $145.0 million–$175.0 million
- effective tax rate of 28.0%–30.0%
- currency adjusted net sales growth of 6.0%–9.0%
- currency adjusted EPS of $5.10–$5.45
The guidance for currency-adjusted net sales growth and EPS excludes the impact of price increases in its Venezuela operations tied to foreign exchange movements.
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