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The Bill and Carl Show—er—Showdown: Herbalife Ltd. (HLF)

Investors looking for a healthy investment in the nutritional or beauty care segment ought to look at Herbalife’s peers who have a much better reputation, track record and balance sheet. The Procter & Gamble Company (NYSE:PG), with a $200.28 billion market cap and income of some $10 billion, and Colgate-Palmolive Company (NYSE:CL) with a $52.04 billion market cap and income of more than $2 billion are much more sound investments.

Procter & Gamble, after months of lagging behind competitors, just reported its third consecutive quarter of impressive gains. It continues to report robust revenue strength thanks to strategic and effective cost cutting efforts, as well as through the introduction of new and improved brands such as its novel Tide mess-free laundry pods and it more lavish and pricey Pantene shampoo, both of which have been well received.

Colgate just reported healthy profit growth for all of 2012, attributed to a growing presence in both emerging and developed markets. Its global share in the toothpaste and toothbrush market rose to 44.6%. Outlook for the coming year looks promising as the company continue to expand in less mature overseas markets while cashing in rising incomes and changing lifestyles in more affluent areas.

Herbalife carries the weight of uncertainty and pales in sales to these two competitors, sporting a market cap of $4.7 billion and questionable income of $464 million.

In reaction to the Federal Trade Commission’s move Jan. 28 to shut down Fortune Hi-Tech Marketing of Lexington, KY, a national multi-level marketing company the FTC called a “global pyramid scheme” shares of Herbalife sank 8% on the news. While unrelated, the slump perhaps suggests Herbalife actually can relate.

It’s been said that life is 10% what happens to you and 90% how you respond to it. If you happen to be thinking about Herbalife stock as an investment, respond to that thought by quickly putting it out of your mind.

The article The Bill and Carl Show—er—Showdown originally appeared on and is written by Diane Alter.

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