Herbalife Ltd. (HLF), Express, Inc. (EXPR) Among Joel Greenblatt’s Key Bets

Page 1 of 2

GOTHAM ASSET MANAGEMENTJoel Greenblatt is well known in the value investing community, having penned a number of books on investing, including You Can Be A Stock Market Genius, in addition to developing his famous “Magic Formula” strategy. Greenblatt focuses primarily on special situations, and some of his investing activity is reported to the SEC via 13F filings. Outlined below are five of Gotham Asset Management’s most important bets heading into the new year (check out Joel Greenblatt’s latest picks).

Express, Inc. (NYSE:EXPR) saw Gotham increase its stake almost 90% last quarter. The clothing retailer posted 3Q results of $0.20 compared to $0.37 year over year. The decline was on the back of 5% lower comp sales and 4% lower sales due to a weak global economy and consumer spending. The retailer recently revised 4Q earnings downward and now expects comp sales to decrease in the low-single digits. With the weakness, the retailer is now the cheapest in the industry at 9x earnings, compared to Rue 21 (16x), Aeropostale (16x) and Gap (15x). Although the stock has seen pressure of late, we believe it could be a solid value opportunity trading at a PEG of only 0.5; its long-term expected EPS growth rate is a whopping 19%. A number of billionaires were invested in Express last quarter, including Jim Simons, Ken Griffin and D.E. Shaw (check out D.E. Shaw’s big bets here).

Deluxe Corporation (NYSE:DLX), meanwhile, saw Gotham up its stake 50% last quarter. Deluxe should manage to see positive performance as economic activity improves in the interim, but a longer-term headwind is the rise of online storage and payment processing, which is decreasing the need for printing. We remain cautious on the printing industry’s prospects given the rise in digital and electronic technologies. Deluxe’s potential, then, remains limited and its 5-year expected EPS growth rate is a low 6%.

Nu Skin Enterprises, Inc. (NYSE:NUS) saw Gotham increase its stake 150% last quarter. Nu Skin sells personal care products in a space that has been seeing pressure lately, due to a continually elevated unemployment rate. Additional issues will come from lower-priced competitors, but the majority of problems over the interim may be related to the Herbalife fallout, which we’ll discuss below. Still, the company’s long-term growth prospects look robust, as exhibited by its 5-year expected earnings growth rate of 17%. Nu Skin calls billionaire Jim Simons as one of its big name investors (see all of Jim Simons’ top picks).

What are the remaining two?

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!