Monday, January 08, 2007

Herbalife (HLF)

After last weeks ending of Herbalife (HLF) stock getting hammered by what was a piece of news that's not even all bad compared to what other companies have gone through as of lately. Though, Herbalife (HLF) was amont the NYSE's biggerst losers and not we are not talking about the Biggest Loser on NBC sorry! We are talking about stock market losers of a stock that lost 20% due to a cut in sales for 2007.

For the recently ended fourth quarter, Herbalife said it expects sales of $482.7 million to $484.7 million, in line with Thomson First Call's average analyst estimate of $488.3 million. The company expects earnings to be within its previously announced forecast of 52 cents to 55 cents a share.

Looking ahead, Herbalife lowered its 2007 sales growth forecast because of slower-than-expected growth in Mexico. The company expects sales to rise 6% to 10%, compared with an earlier projection of 10% to 15%. Herbalife still expects earnings of $2.40 to $2.47 a share for the year. Shares were trading down $7.95 to $31.35.

Is Herbalife still a buy? Well, that's the question, but we would like to bring this up to at least look into this stock alittle deeper.

We feel that here are some facts that make it still an interesting stock. The company Herbalife (HLF) is reaffirming its previous guidance of $2.40 to $2.47 in earnings per share. However, those results would reflect sales growth of between 6% and 10%, combined with improved operating margins and a lower tax rate. The company previously expected a 10% to 15% increase in sales.

Looking at current sales trends, the company predicts slower sales growth in Mexico than it previously estimated. Those results should be partially offset by sales growth in the U.S. and several other countries, the company says.

Herbalife (HLF) expects to earn 50 cents to 55 cents a share in the first quarter of 2007, excluding expenses related to its so-called realignment for growth initiative. Analysts surveyed by Thomson First Call were expecting the company to earn 58 cents a share in the quarter.

What do you think? Buy? Sell? Hold? Keep looking for a different stock?

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