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