At some point, I was made aware that my senpai, Seth Klarman, had purchased Herbalife. I’m way overdue on publishing anything about it, I bought at around $16~.
While the business is shady at best, and the growth long term is like… 2% (at least it doesnt shrink!), the MLM nature of the company gives it a moat, the return of live events gives us a catalyst, and the nature of the business makes it likely to do well in bad times (People like to be sold hope when everything seems to be falling apart.).
When it comes to quality, the ROA for the company is easily over 9%. Good business… but is the price right?
Without further adieu, lets get on to the
Valuation
With any normal reasonable cashflow over “the company literally imploding”, my calculations give us easily a 100% upside. Delightful.
Conclusion
What do you think? BUY, you fool.
Disclaimer
My apologies, Im kind of in vacation mode and busy with my personal life, so I publish less and later. We’ll get back to your regularly scheduled insights around september.
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