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

Pitney Bowes Inc. (NYSE:PBI) saw Gotham up its stake 90% last quarter. The mail equipment and supplies company saw total revenues down 6% in 2012 and are expecting a decline of 1% in 2013. Driving Pitney’s weakness has been a soft economy and software replacing much of the company’s key equipment. We believe that tech innovations will continue to pressure this particular industry, further reducing the need for postal supplies. A poor performance outlook is already seen on the sell-side, which expects Pitney’s bottom line to shrink by an average of 5% a year over the next half-decade. Interestingly, one of Steven Cohen’s SAC Capital subsidiaries took a new stake last quarter (check out Steven Cohen’s top bets).

Last but certainly not least, Herbalife Ltd. (NYSE:HLF) has seen extraordinary pressures of late. Gotham took a new position in the now flailing nutrition stock last quarter. Following the announcement that Bill Ackman is short, Herbalife has tumbled over 40%. Ackman has brought to light concerns over sustainability and profitability, namely labeling the company a pyramid scheme.

We believe that Gotham will continue to support Herbalife given he was also buying Nu Skin on its weakness during the summer. Herbalife trades as one of the cheapest stocks in the industry at only 7x earnings, but also has solid growth prospects given the generally bullish outlook that most hold over the health products industry. Ken Griffin – founder of Citadel Investment Group – is also one of Herbalife’s big-name investors (check out Ken Griffin’s latest picks).

To recap: Gotham Asset Management has big bets in extraordinary places, including a 150% increase in skincare (Nu Skin) and new position in nutrition (Herbalife), both of which are facing pressures related to business model concerns. Gotham’s other big increases were in the retail space as well as the business sector, with Pitney and Deluxe. It appears that Greenblatt is betting on a rebounding economy in 2013.

For more coverage of the stocks discussed here, continue reading below:

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