Trade-Ideas: Herbalife (HLF) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Herbalife ( HLF) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Herbalife as such a stock due to the following factors:

  • HLF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $90.6 million.
  • HLF is up 13.6% today from today's close.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in HLF with the Ticky from Trade-Ideas. See the FREE profile for HLF NOW at Trade-Ideas

More details on HLF:

Herbalife Ltd., a nutrition company, develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products. HLF has a PE ratio of 12.2. Currently there are 2 analysts that rate Herbalife a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Herbalife has been 2.5 million shares per day over the past 30 days. Herbalife has a market cap of $3.8 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.79 and a short float of 61.9% with 14.81 days to cover. Shares are up 10.4% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Herbalife as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for HERBALIFE LTD is rather high; currently it is at 53.23%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.11% trails the industry average.
  • HERBALIFE LTD has improved earnings per share by 5.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HERBALIFE LTD reported lower earnings of $3.39 versus $4.91 in the prior year. This year, the market expects an improvement in earnings ($4.05 versus $3.39).
  • HLF, with its decline in revenue, underperformed when compared the industry average of 7.3%. Since the same quarter one year prior, revenues fell by 10.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Personal Products industry average. The net income has decreased by 16.4% when compared to the same quarter one year ago, dropping from $123.54 million to $103.29 million.
  • Net operating cash flow has significantly decreased to $61.90 million or 68.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

Global Stocks Rally as US-China Trade War Thaws; Dow Could Test 25,000

Tesla Jumps on Model 3 Expansion Hopes, China Trade Truce

Tesla Jumps on Model 3 Expansion Hopes, China Trade Truce

Apple Gains as U.S. China Trade Tensions Ease After Weekend Summit

Apple Gains as U.S. China Trade Tensions Ease After Weekend Summit

Video: There Are Some Big Changes Coming to the PGA Championships in 2019

Video: There Are Some Big Changes Coming to the PGA Championships in 2019

Video: One-on-One With Pluralsight's CEO Following Its Successful IPO

Video: One-on-One With Pluralsight's CEO Following Its Successful IPO