Herbalife Ltd. : Potential of recovery
Entry price | Target | Stop-loss | Potential |
---|
$47.32 |
$0 |
$45.4 |
-100% |
---|
Herbalife Ltd. is a network marketing company that sells weight management, nutritional supplement and personal care products. The Company sells its products globally through a network of independent distributors. Herbalife also sells literature and promotional materials.
At the beginning of May the share fell more than 34% after hedge-fund manager David Einhorn questioned the company’s disclosures. The chairman of Greenlight Capital Re Ltd., asked on a May 1 conference call why Herbalife had stopped disclosing a breakdown of three groups of distributors in filings that it had previously provided. The questions sent the shares down 20 percent that day. However analysts are confident on the company, have lately revised upward their revenue estimates and count on EPS of 3.3 USD for this year.
The share after the sharp fell is trading in a neutral range between USD 55 an USD 47. The security is coming back on the lower band of this range and gives an opportunity to investors to take a long position. The first target price will be USD 52.5 and then USD 55. The stop loss will be placed at USD 45.4
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