The Return of Herbalife Ltd. (HLF)

Competitors

Avon Products, Inc. (NYSE:AVP), has had claims made against it, that it is a scam in some way. Avon products is currently 10% away from its 52-week highs. Avon has revenue of about $11 billion, and although this company is rated a buy, I would still recommend HLF. This is mainly due to the fact that it rejected a buyout offer of $24.75, which was almost 20% above Avon Products, Inc. (NYSE:AVP)’s stock price at the time. Avon, has also had a ton of legal allegation charges, such as violations of the Foreign Corrupt Practices Act. Avon spent nearly $250 billion trying to fight off  these allegations. This really killed their cash flow. I believe that Avon is a good company, they just have a history of a bad past. These allegations could show up again a few years from now.

Nu Skin Enterprises, Inc. (NYSE:NUS), is also considered to be a good company, due to its distributors, and its amazing client portfolio. Nu Skin has revenue of about $2 billion. This makes it pretty small as compared to the other two mentioned in this article. Nu Skin Enterprises, Inc. (NYSE:NUS) is more of a long term company. This company would be a company that would probably net a return 5 to 10 years from now. Another factor to consider is their net operating income at about $250 million; while Herbalife Ltd. (NYSE:HLF) stands at $600 million. For these reasons I would recommend Herbalife. Because Herbalife has already been beaten down pretty badly, and it is now their time to slowly start to go back up.

Conclusion

This company has been very risky lately; however, the future should be good. This company has what it takes to return to former levels, with tons of new products, tons of distributors, and tons of income. This stock just has a bunch of current “issues” not problems. As time goes by, the dust will settle in and slowly this stock will return to where it was before, at $70 dollars a share.

Shazir Mucklai has no position in any stocks mentioned. The Motley Fool has the following options: Long Jan 2014 $50 Calls on Herbalife Ltd.