Herbalife Ltd. (HLF): Drugs' Spotlighted Daily Leader

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 1.3%. By the end of trading, Herbalife rose 99 cents (2.6%) to $39.01 on light volume. Throughout the day, 2.7 million shares of Herbalife exchanged hands as compared to its average daily volume of 7.7 million shares. The stock ranged in a price between $37.76-$39.10 after having opened the day at $37.95 as compared to the previous trading day's close of $38.02. Other companies within the Drugs industry that increased today were: Novogen ( NVGN), up 40.2%, Astex Pharmaceuticals ( ASTX), up 10.3%, Obagi Medical Products ( OMPI), up 10.1%, and Sucampo Pharmaceuticals Inc. A ( SCMP), up 7.9%.
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Herbalife Ltd., a network marketing company, sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products worldwide. Herbalife has a market cap of $3.83 billion and is part of the health care sector. The company has a P/E ratio of 9.2, below the S&P 500 P/E ratio of 17.7. Shares are up 15.4% year to date as of the close of trading on Tuesday. 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 robust revenue growth, notable return on equity, impressive record of earnings per share growth, good cash flow from operations and increase in net income. 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, Atossa Genetics ( ATOS), down 12%, Biostar Pharmaceuticals ( BSPM), down 11.5%, Progenics Pharmaceuticals ( PGNX), down 8.7%, and Opexa Therapeutics ( OPXA), down 8.5%, were all laggards within the drugs industry with Gilead ( GILD) 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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