Q: I have owned this in the past and am looking at reentering in the $13 range if it gets close to that. Your thoughts on the quarter and on my thesis that it should be a low volatility, slow growth dividend payer would be appreciated.
5i Research Answer:
EPS of 14c missed estimates of 30c; revenue of $248.6M marginally beat estimates. EBITDA of $15.2M missed estimates by 32%. Post quarter a couple of brokers downgraded the stock. The dividend was increased 2.9%. HLF blamed tariffs, consumer uncertainty and macro factors. It is taking steps such as changing pricing and working to reduce costs. Consensus calls for about 10% earnings growth next year. HLF is quite small, and of course has some economic sensitivity. But it is priced well at 8X earnings. Debt is also a bit high. By no means would we see it as a 'blue chip' consumer name, but it look OK for higher-risk income within the sector.