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: George Schultze On His Fund's Unique Approach to Distressed Investing

Apr 16 2015 | 1:01am ET

George Schultze is a managing member of Schultze Asset Management, a long/short...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note