Thursday, May 17, 2007

Mad Money's Jim Kramer: Herbalife Deserves His Respect

From Jim Cramer's Mad Money In-Depth Stock Picks

Cramer regrets having been negative on HLF, which he says is not a typical multi-level marketing scheme, and so deserves his respect. The company's first quarter earnings were better than expected and delivered in-line, beatable guidance for the second quarter. HLF was granted permission to market its product in two Chinese provinces, has a high-margin business model, and "enormous" cash flow. In addition, HLF's $300 million buyback has been approved, and it has a new 2% dividend. The fact that HLF sells at 10% less than its rivals does not make sense to Cramer, who says that situation will not last. Cramer declares HLF is a triple buy, but would not make a move until after the open, because the price is higher early.

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