Herbalife Ltd. (HLF): Today's Featured Health Care Laggard

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 Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day up 0.5%. By the end of trading, Herbalife fell 60 cents (-1.3%) to $45.01 on heavy volume. Throughout the day, 2.5 million shares of Herbalife exchanged hands as compared to its average daily volume of 1.2 million shares. The stock ranged in price between $44.74-$45.58 after having opened the day at $45.44 as compared to the previous trading day's close of $45.61. Other companies within the Health Care sector that declined today were: Dynavax Technologies Corporation ( DVAX), down 47.3%, CombiMatrix Corporation ( CBMX), down 28.6%, Hooper Holmes ( HH), down 19.6%, and Senesco Technologies ( SNT), down 15.8%.
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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 $4.94 billion and is part of the drugs industry. The company has a P/E ratio of 11.8, below the S&P 500 P/E ratio of 17.7. Shares are down 11.5% year to date as of the close of trading on Thursday. 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 revenue growth, notable return on equity, impressive record of earnings per share growth, increase 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 positive front, Spherix ( SPEX), up 22.1%, Prana Biotechnology ( PRAN), up 16.9%, Zalicus ( ZLCS), up 15.6%, and DARA Biosciences ( DARA), up 15%, were all gainers within the health care sector with Express Scripts ( ESRX) being today's featured health care sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the health care sector could consider Health Care Select Sector SPDR ( XLV) while those bearish on the health care sector could consider ProShares Ultra Short Health Care ( RXD).

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