Bargains in Multilevel Marketing Stocks

The multilevel marketing company, Herbalife Ltd. (HLF), a Los Angeles based company which markets weight management, nutritional supplement, and personal care products, tanked 11% today, Monday, at the close of the market, and down another 2% in after-market trading. This was due to short selling hedge fund manager Bill Ackman announcing that he will reveal tomorrow how Herbalife is a "massive fraud."

This has caused other MLM stocks to sink, creating some potential bargains. Multilevel marketing stocks, or direct selling stocks, which are also known as and network marketing stocks, operate by recruiting salespeople to sell their products. The salespeople receive commissions from their own sales and a portion of the sales of people recruited in their downline.

Herbalife could recover if it survives Ackman's attack. The stock trades at 12 ties trailing earnings and seven times forward earnings.

Tupperware Brands Corporation (TUP) was down slightly. It is an Orlando, Florida based company which markets kitchen products, cosmetics and personal care products. The trailing P/E is 16, and forward P/E is 13. The stock sports a yield of 3.3%.

Avon Products Inc. (AVP) went down by 1.4% today. It is a New York based company which markets cosmetics, fragrances, skin care, and toiletry products, along with various other consumer products. It trades at 14 times forward earnings, and pays a yield of 1.6%.

Nu Skin Enterprises Inc. (NUS) fell by almost 3%. It is a Provo, Utah based company which markets personal care products and nutritional supplements. The stock has a P/E of 10, and a yield of 1.8%.

USANA Health Sciences Inc. (USNA) dropped almost 7% today. It is a Salt Lake City based company which markets vitamins, minerals, skin products and personal care products. The stock has a P/E of 13, and a forward P/E of 10.

Mannatech Inc. (MTEX)  was down 3% today. It is a Texas based company which markets nutritional supplements, skin care products, and weight-management products. The company's P/E is 12.

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By Fred Fuld at