As I look at this I come away thinking that as an Investor I look at Balance sheets, Income Statements,Cash flow....etc.....I'm not hear as judge and jury on how the company gets to that point
case in point my three daughter and wife buy skinny jeans at $160 a pop...do I think that is crazy..Yes
does the company sell them and are profitable...yes....do I pass judgement on the way they market themselves....No....the bottom line it works and It is a good investment...Why because the numbers don't lie.........
I owned HLF for a time. I bought in around 52, and ended up selling around 44 (huge loss, as truthfully I got spooked by the whole Einhorn debacle). I am not sure what to think, other than both Einhorn and Ackman are no dummies. Looking back, I feel lucky that I exited @ 44 bucks.
At this point, NO way would I ever buy back in. Too much smoke and mirrors surrounding HLF right now, and it has now attracted a bunch of daytraders and speculators who are gambling for short term gains.
Your post is too straightforward and logical... so no one is going to comment. As a former PwC auditor, the first place I looked was to see if any parts of the balance sheet were getting bloated. This is were the wrongs get hidden. Bloated Accounts Receivable, Inventory, Other assets, etc.etc. I don't see anything that raised my suspicion. Also, Ackman's accusation that the accounting classification of the P&L was wrong and so easy to see.... REALLY. And you don't think the partner review of the big 4 accounting firm is going to ask such a simple question. Not likely!!
Another Amateur risking his money. "The numbers don't lie". Yeah right. I don't think a single informed short seller is shorting this because of the BALANCE SHEET. Can a Pyramid scheme as Bill Ackman alleges generate these kind of numbers. Ofcourse, they can!
I don't think anything in Bill Ackman's presentation questions the numbers. His primary argument has nothing to do with what the numbers are rather what these guys are doing to get these numbers.
Even Enron had a great balance sheet and "numbers"