Well, Bill Ackman may think HLF is a ponzi scheme - and I happen to agree - but I just ran a 5-year discounted cash flow model on my projections of the company's future owner earnings (i.e., Warren Buffet's version of free cash flow). And, cutting to the chase, I calculate the shares currently have a full and fair value of $56.49 a share. Also, when you throw in a healthy margin of safety, the shares are a definitely buy right now.
Again, I've based my analysis NOT on reported GAAP earnings, but on the actual projected cash that can be returned to shareholders - what Buffet calls "owner earnings".
So, will there be any buyers of HLF?
Personally, I won't be taking a position. I ran my analysis simply to see if this ponzi will in fact be generating more cash in the future.
Read Fusion Research's rebuttal to Mr. Ackman's ppt presentation. Seems PS mis-interpreted the mathematical model defining a pyramid scheme. A billion dollar gamble on a wrong interpretation. What will PS share holders have to say???????
I used to run all kinds of cash flow analyses. I do not do them now. For me, they are less useful than the PSYCHOLOGY of the players.
Let Icahn do the math. Let Icahn pay big bucks to have detailed legal review. I just watch what Icahn does and put money on the table. That's it.
of course projected cash flows are just that: projections. Lots of assumptions regarding growth levels, profit margins, expenses, and with the event risk on this equity you better have a HUGE margin of error.