The following are today’s upgrades for Validea’s Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
HERBALIFE NUTRITION LTD (HLF) is a small-cap value stock in the Major Drugs industry. The rating according to our strategy based on Joel Greenblatt changed from 80% to 90% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Herbalife Nutrition Ltd. is a global nutrition company that provides health and wellness products. The Company sells weight management; targeted nutrition; energy, sports, and fitness; outer nutrition products; and literature and promotional items to and through a network of independent members. Its segments include North America, Mexico, South and Central America, EMEA, Asia Pacific, and China. Its weight management products include meal replacements, protein shakes, drink mixes, weight loss enhancers, and healthy snacks. Its targeted nutrition products include functional beverages and dietary and nutritional supplements containing herbs, vitamins, minerals, and other natural ingredients. Its energy, sports, and fitness category includes products that support a healthy active lifestyle. Its outer nutrition products include facial skin care, body care, and hair care. The Company’s literature and promotional items include start-up kits, sales tools, and educational materials.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| EARNINGS YIELD: | NEUTRAL |
| RETURN ON TANGIBLE CAPITAL: | NEUTRAL |
| FINAL RANKING: | PASS |
Detailed Analysis of HERBALIFE NUTRITION LTD
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two — and only two — fundamental variables. The “Magic Formula,” as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500’s 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
