#brovesting - for bros - by bros

Posts tagged Carl Icahn

HSD – Herbalife Ltd $HLF

Today’s hot stock of the day was Herbalife Ltd (HLF). Herbalife today announced the completion of their reaudited financial statements for the fiscal years ending 2010, 2011, 2012. This caused their stock to jump 9.43% on the day, which did come down a little from their intraday highs.

Herbalife has made a lot of news recently as there are two activists, Bill Ackman and Carl Icahn, who have both been very outspoken about the company. Both have opposing positions in the stock, Icahn has a long position in HLF whereas Ackman has a short position.

The term “activist” is a fairly new term, as this is the group of people who used to be called “corporate raiders”.¬†For those that are not familiar with activists, these are people who hold a large position in a company and are attempting to use their large amount of votes when it comes to shareholder voting, to influence a company to move in a certain direction. These activists can be good and they can be bad for the company, it all depends on the company and the activist and how strong they are. Regardless their main purpose is always to create more value for them and make themselves money. Corporate raider tends to be a more appropriate term for this role, as what they pretty much do is come in and attempt to strongarm the company into doing what they want. Whether it is stock buybacks or dividends to create income for them, getting rid of board members that are detrimental or do not see their vision, restructuring the company to be able to run better, or breaking the company up in order to also create wealth for them.

Herbalife is not a stock that is easily figured out as it is heavily traded and there is a lot of talk about it. Overall, analysts have it rated between a strong buy and a buy, and it has done very well year to date, just shy of 130%.

Herbalife

Disclaimer: I currently do not hold the above mentioned investment. I am not looking to add to a position in the above mentioned investment, within the next 30 days. I am not looking to take a short position in the above mentioned investment within the next 30 days.

Categories

Archives