how much of a bounce are you hoping for. Consider, it was only 43 before the short attack and $50 is a fully valued valuation on some metrics. Regardless of the fundamentals, having somebody with unlimited resources like Ackman with sole mission of putting your company out of business, is probably worth at minimum 20% discount. That would be $35/share using $43.50 pre attack price.
Wrong. Ackman's resources are limited by the size of his hedge fund. So far, His bet against HLF represents 9% of its total asset value under management. This is obscenely high. If the stock goes higher, that can ruin the fund's performance for the entire year of 2013, and dramatically reduce its asset value. And, if the investors rush to take cash out, it can potentially get into a situation like the one that exposed Madoff, Enron, and ruined Lehman Brothers.
we are dropped to 24$ not long ago, and we suffered. I would like to see the stock go to 55$ and let the short suffer....honestly it is very POSSIBLE...with the buyback, dividends and that 20 mil shares shorted.
Very often a stock will bounce back and overshoot. $60 per share is not out of the question. Why don't you worry about your own investment account, where, when and how much I invest in any stock is my business.
Sentiment: Strong Buy
Exactly - Ackman admits he started shorting before the he hung up during the conference call. Stock was $72+ then. You start the process of shorting 1 Billion dollars it's going to drive a stock down with other panick selling. A stock doesn't go from $72 to $40 from poor earnings.
To be honest I don't even know how bad the earnings were. This stock has obviously had good earnings for 3 straight years going from $20 in late 2009 to $72+ before the attack. I can't imagine it dropping lower than $65 after that report. Which imo is where the stock should be trading today. That leaves $27 on the table for your $38 theory... This is easily going back over $50 and I bet over $60 throughout the year. Especially once the Billion Dollar Squeeze begins :)
$50 was a rich valuation for this type of company though. and i was being genrous with my 20% discount. I would not be surprised with a 30 or 40% discount either. At $26 i bought because the PE was 7 and dividend was 4%+ I can find tons of cheap stocks with metircs equivalent to HLF trading at $38. So what is the point really of staying long this name. It will almost surely get raided again.
You seem to conveniently forget that the SHORT attack started at $73/share. Using your 20% discount model, even while we conveniently push aside the massive SHORT squeeze that is going to erupt tomorrow and the day after, yields a PPS value of $58. LOL!!!
Sentiment: Strong Buy