Herbalife Ltd. (HLF): Today's Featured Drugs 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 Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day up 0.4%. By the end of trading, Herbalife fell $3.57 (-8.2%) to $40.02 on heavy volume. Throughout the day, 28.1 million shares of Herbalife exchanged hands as compared to its average daily volume of eight million shares. The stock ranged in price between $38.71-$44.54 after having opened the day at $43.44 as compared to the previous trading day's close of $43.59. Other companies within the Drugs industry that declined today were: Repros Therapeutics ( RPRX), down 40.3%, Cormedix ( CRMD), down 10.1%, Oxygen Biotherapeutics ( OXBT), down 6.4%, and Tianyin Pharmaceutical ( TPI), down 5.7%.
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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 $4.67 billion and is part of the health care sector. The company has a P/E ratio of 11.2, below the S&P 500 P/E ratio of 17.7. Shares are up 30.6% year to date as of the close of trading on Friday. Currently there are seven analysts that rate Herbalife a buy, no analysts rate it a sell, and two 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, Keryx Biopharmaceuticals ( KERX), up 76.6%, Ventrus Biosciences ( VTUS), up 23.5%, Novogen ( NVGN), up 19.1%, and Bioline Rx ( BLRX), up 11.7%, were all gainers within the drugs industry with Dendreon ( DNDN) being today's featured drugs industry leader.

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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