NEW YORK (TheStreet) -- Shares of Herbalife Ltd. (HLF) are down -5.10% to $56.79 after it was reported that the Justice Department and the FBI are investigating the multi-level marketing company that hedge fund manager Bill Ackman has alleged is a pyramid scheme, sources say, the Financial Times reports.
The criminal investigation by the FBI and U.S. attorney's office in Manhattan raises the stakes for Herbalife, which is already facing civil inquiries from multiple government agencies that are looking into the Los Angeles-based company and its associated network of independent distributors, the FT said.
TheStreet Ratings team rates HERBALIFE LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HERBALIFE LTD (HLF) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."