Trade-Ideas: Herbalife (HLF) Is Today's Post-Market Leader Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Herbalife as such a stock due to the following factors:
- HLF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.1 million.
- HLF is up 2.1% today from today's close.
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More details on HLF:
Herbalife Ltd., a nutrition company, develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products. HLF has a PE ratio of 9.7. Currently there are 2 analysts that rate Herbalife a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Herbalife has been 2.1 million shares per day over the past 30 days. Herbalife has a market cap of $3.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 3.30 and a short float of 44.1% with 10.22 days to cover. Shares are down 12.2% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Herbalife as a
. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for HERBALIFE LTD is rather high; currently it is at 52.68%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HLF's net profit margin of 0.89% significantly trails the industry average.
- HERBALIFE LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HERBALIFE LTD increased its bottom line by earning $4.91 versus $3.95 in the prior year. For the next year, the market is expecting a contraction of 10.8% in earnings ($4.38 versus $4.91).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Personal Products industry. The net income has significantly decreased by 92.1% when compared to the same quarter one year ago, falling from $141.95 million to $11.25 million.
- Net operating cash flow has significantly decreased to $101.91 million or 54.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Herbalife Ratings Report.
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