Herbalife Analyst Says Stock Is 'Best Idea' For '14

Jan 7 2014 | 1:59am ET

An analyst who has sparred with Pershing Square Capital Management's William Ackman over nutritional supplements company Herbalife is betting that company's 2014 could rival its 2013.

Herbalife shares soared last year, costing Pershing Square about a half-billion dollars and leading D.A. Davidson's Tim Ramey to "thank Mom, Jesus and the short-sellers." Ackman announced a $1 billion short against Herbalife in December 2012, calling the company a pyramid scheme. Ramey, who called Herbalife his "single best idea" in 2013, credited the scrutiny brought about by Ackman's allegations for the stock's surge.

Now, he's doing it again, saying that Herbalife is his best idea for 2014.

"Unleashed from the bear raid, Herbalife should trade on growth prospects," Ramey said. And those prospects are impressive.

"It has impressive margins, huge cash flow, which it has used to benefit shareholders with aggressive share repurchase and dividend increases, and its revenue growth beats anything else we cover," Ramey wrote.

Ackman, however, has not raised the white flag, alleging last month that Herbalife had lied about ending its lead-generation recruiting methods and alleging that its Chinese operation "likely violates the multi-level marketing restrictions" there.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.