Herbalife Ltd. (HLF): Today's Featured Drugs Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Herbalife ( HLF) pushed the Drugs industry higher today making it today's featured drugs winner. The industry as a whole closed the day down 0.9%. By the end of trading, Herbalife rose 75 cents (1.5%) to $51.35 on heavy volume. Throughout the day, 2.7 million shares of Herbalife exchanged hands as compared to its average daily volume of 1.5 million shares. The stock ranged in a price between $50.74-$53.19 after having opened the day at $52.97 as compared to the previous trading day's close of $50.60. Other companies within the Drugs industry that increased today were: Hemispherx Biopharma ( HEB), up 30%, Peregrine Pharmaceuticals ( PPHM), up 24.3%, Arrowhead Research Corporation ( ARWR), up 16.1%, and Oxygen Biotherapeutics ( OXBT), up 15.4%.
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Herbalife Ltd., a network marketing company, sells weight management, nutritional supplement, energy, sports and fitness, and personal care products worldwide. Herbalife has a market cap of $5.66 billion and is part of the health care sector. The company has a P/E ratio of 13.6, equal to the average drugs industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 2.1% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate Herbalife a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Herbalife as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the negative front, Biocryst Pharmaceuticals ( BCRX), down 28.7%, Novogen ( NVGN), down 20.6%, ARCA biopharma ( ABIO), down 17.9%, and Theratechnologies ( THER), down 16.8%, were all laggards within the drugs industry with Pfizer ( PFE) being today's drugs industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the drugs industry could consider SPDR S&P Pharmaceuticals ETF ( XPH) while those bearish on the drugs industry could consider ProShares UltraShort Nasdaq Biotech ( BIS).

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