Market Overview

Chapman Says You Should Own Herbalife Even In The Low $60s (HLF)

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Robert Chapman of Chapman Capital came onto CNBC to talk to Scott Wapner Wednesday afternoon about his position in Herbalife (NYSE: HLF).

Here are some highlights from the interview:

His Portfolio

  • Herbalife constitutes the largest position of all his portfolios
  • Some Clients have as much as 50 percent of their holdings in the company
  • Bought in the low $40s and continues to hold

Why Does he Like Herbalife so Much?

  • Only trading at roughly 15 times 2013 earnings of $5.00 per share

On Ackman:

  • "Making Money in a stock is fun, but making money when Bill Ackman losing it is like a ride in the circus, but that's not why I'm long,"
  • Does not believe Ackman has sold a single share of Herbalife
  • Ackman made the best investment in the history of Wall Street by buying General Growth Properties (NYSE: GGP)

Where is Herbalife Going?

  • To $300 if it remains public
  • Company had very tough comps- implying the market is heavily discounting it
  • LBOs are in Herbalife's DNA
  • At some point it will get LBO-ed, this could be five to 10 years down the road

Similarities to Philip Morris (NYSE: PM)

  • Similar to Phillip Morris 13 years ago
  • Uses it as a template
  • International spin off solution to an US regulatory problems

Herbalife shares rose slightly during the interview, and were up 7.84 percent to $64.73.

Posted-In: Bill Ackman Carl IcahnCNBC Hedge Funds Markets Movers Media General Best of Benzinga

 

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