Herbalife Ltd. Bull: 'A Very Cheap Stock' Ahead Of Q4 Results

Herbalife Ltd.

, set to post earnings Thursday, is a "powerfully attractive" stock at its current price, according to a long-time bull. Pivitol Research's Timothy S. Ramey reiterated a Buy and $75 target on the stock Monday and said the company is "clearly a sensible, ethical business," despite a pending investigation by the Federal Trade Commission. Ramey has been positive on Herbalife since at least last January, when he issued a bullish note at his former employer, D.A. Davidson. Herbalife shares are down nearly 49 percent since then, partly from a high-decibel short campaign by William A. Ackman's Pershing Square Capital. Herbalife closed Monday down 3.7 percent at $34.10. Ackman has characterized Herbalife's multi-level marketing model as an illegal pyramid scheme. With about 80 percent of Herbalife's business derived in non-U.S. markets, Ramey said the strengthening dollar makes the company's November guidance for the fourth quarter earnings of $1.30 to $1.40 a share is "stale." Analysts on average expect earnings of $1.22 a share, on sales of $1.16 billion. For 2015, Ramey expects Herbalife sales will fall 3.4 percent on a 2.1 percent increase in volume offset by a 5.5 percent currency headwind. "Yet the stock remains very cheap," Ramey said, adding that investors with a 12-to-18-month horizon will be "well-rewarded." Handicapping the risk of the FTC investigation is "very difficult," Ramey said, but he added that an adverse outcome is "unlikely."