Michelle Fox, Web Producer
12 May 2011

http://www.cnbc.com/id/15840232?play=1&video=3000021772

“It’s time for a Herbalife victory lap,” Cramer said Thursday. The direct seller of nutritional supplements [HLF 106.75 0.06 (+0.06%) ] reported a “thing of beauty” quarter on May 2. Herbalife posted earnings of $1.43 per share, a 22 cent beat on revenues that rose 28.5 percent year-over-year. It also gave upside guidance for the rest of 2011 and boosted its dividend by 60 percent.

Many on Wall Street have long accused direct sales companies of being pyramid schemes. However, Herbalife’s latest quarter should prove the critics wrong and erase any doubts about this high-flying stock, Cramer said.

“This is simply a terrific company that has figured out a brilliant way to sell these health oriented products through one-on-one testimonials,” he said.

Herbalife shares soared after it reported strong earnings, which Cramer thinks is due, in part, to the company’s explosion in the emerging markets scene. Sales in India are up 154 percent and Russia is up 75 percent while Brazil and China are both up 28 percent.

Cramer’s been on the Herbalife bandwagon since November of 2009. Since then, the stock has gained 166 percent. And it’s up 40 percent since Cramer last spoke with CEO Michael Johnson in March. So is there more money to be made in HLF? To find out, Cramer invited Johnson back on the show. To see the full interview, watch the video.

Source: CNBC Mad Money

Watch related videos:

• CNBC: Celebrating CEO’s Who Have Done Great – Herbalife’s Michael Johnson (8.03.2010)
• CNBC’s Jim Cramer Interviews Herbalife CEO Michael O. Johnson on Growth (5.12.2010)
• Herbalife Hits 52-Week High, CNBC’s Jim Cramer Interviews Michael O. Johnson (11.10.2009)

It is up to all of us to send the Canadian fishing industry a message they cannot ignore: Stop the killing of defenseless seal pups, or we’ll put you out of business. Thanks for helping save seals!

Posted 2/17/2011 7:14:30 AM by FSS Herbalife Invests in Itself

While consumers may be struggling to keep cash in the bank, companies are flush with it these days. In fact, non-financial companies in the United States have nearly $2 trillion sitting in cash. That’s a serious amount of dough.

Time to Put that Money to Work

During the financial panic, it made sense for companies to stash cash as a defensive position. As the economy continues to improve, however, the question now becomes – what will these companies do with all that cash? With money market funds and Treasury bills paying paltry returns for the foreseeable future, businesses need to find other places to put their money to work.

There are plenty of choices. Companies could spend that cash reinvesting in current operations, acquiring other firms, or through capital spending – investing in projects in hopes of earning high rates of return. Another option would be to distribute excess cash to shareholders through higher dividend payments. Or, the company could invest in itself; that is,buy back shares

Investing in Themselves

When a company announces a stock buyback, it’s a powerful signal to investors that management is confident in the long-term outlook of the company and that the share price is fundamentally undervalued. A common theme throughout most share repurchase announcements reads something like:

‘We feel the best use of our cash was to invest in ourselves.’ Or, ‘We believe the market has significantly undervalued our stock.’

While this may be the case, corporate executives usually aren’t ones lacking in confidence, and most will tell you that their company’s stock is undervalued.

Here is one company doing just that:

Herbalife announced on May 3, 2010 that it was authorized to spend up to $700 million buying back shares through the end of 2014. This represents a whopping 23.8% of total shares outstanding. The company has spent $106 million in the first nine months of 2010 repurchasing shares.

That’s one way to grow EPS.

The other way is to grow earnings, which it has been doing quite well lately. In the third quarter of 2010, Herbalife reported a 31% increase in net income year-over-year on 15% sales growth. Management also raised its guidance for the remainder of 2010 following the strong quarter. Analysts expect the company to grow EPS 40% in 2010 and 15% in 2011. It is a Zacks #2 Rank (Buy).

The valuation picture looks attractive too. Shares trade at 13.0x forward earnings, a discount to the industry average of 17.4x. Its PEG ratio is 1.0.

Herbalife is a global network marketing company offering a range of science-based weight management products, nutritional supplements and personal care products intended to support weight loss and a healthy lifestyle.

Related news: “Mad Money Lightning Round:” Stick with Herbalife

http://www.thestreet.com/story/10983351/1/mad-money-lightning-round-stick-with-herbalife.html