Despite Its Legal Battles, Herbalife Ltd. (HLF) Enjoys Strong Fundamentals

Nu Skin’s OCF for 2012 OCF was $310,976 million, representing a 67% increase from the OCF ($187,883 million) it registered just two years earlier.

For the year ending on March 31, its current assets were listed at $599,403 million. This figure is nearly twice what its current liabilities ($320,000 million) were during that same period, a ratio considered desirable by value investors who demand strong fundamentals. And Nu Skin Enterprises, Inc. (NYSE:NUS)’s PEG estimated over a five year period is only .78, a good sign.

GNC Holdings Inc (NYSE:GNC)’s current ratio is 3.05, markedly higher than is Herbalife’s which stands at 1.99, and its levered free cash flow is $208.7 million. This latter statistic represents the sum a company has left over to pay for expansion and other expenses after interest on its debt has been paid off, being an important predictor of a company’s ongoing financial strength.

And its ratio of current assets ($818,797 million) to current liabilities ($245,319million) for the year ending on March 31 was even more impressive than was Nu Skin’s, further substantiating the fact it stands on firm financial ground. Also noteworthy: its PEG as estimated over the next five years is only .87.

A Foolish conclusion

Herbalife Ltd. (NYSE:HLF) came under close public scrutiny and its stock price plunged after it faced a stockholders’ suit at the end of last year. But those problems might be simply a bump in the road to the company’s continued growth. Its market value has rebounded sharply during recent months and its fundamentals point to ongoing financial security. And if investors would prefer to look elsewhere as they attempt to benefit from the ever expanding market for anti-aging products, they have at least two attractive alternatives: Nu Skin and GNC.

The article Despite Its Legal Battles, Herbalife Enjoys Strong Fundamentals originally appeared on Fool.com and is written by Harriet Tramer.

Harriet Tramer Tramer has no position in any stocks mentioned. The Motley Fool has the following options: long January 2014 $50 calls on Herbalife Ltd. (NYSE:HLF). Harriet is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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