Strategist Sees Heavy Trading Of Herbalife Puts Ahead Of Earnings

Herbalife Ltd. HLF has seen a heavy volume of calls trading ahead of its first-quarter earnings report, a strategist told Benzinga.

The multi-level marketer, expected to post first-quarter results after the bell Tuesday, changed hands recently off more than 4 percent at $40.14.

"We've seen almost four times the normal amount of calls trading," said JJ Kinahan, chief strategist for TD Ameritrade.

The activity may suggest investors are bullish on the stock.

Six analysts polled by FactSet are evenly divided between Buy and Hold ratings on Herbalife.

Kinahan also noted an even higher recent volume of puts trading in Herbalife, "but they're so far out of the money it's hard to take them seriously," Kinahan said.

Analysts expect Herbalife to post adjusted earnings of $1.01 a share, on revenue of $1.09 billion.

A year ago the company posted adjusted profit of $0.74 a share, on revenue of $1.26 billion.

Bill Ackman of Pershing Square Capital Management has repeatedly disparaged Herbalife as a "pyramid scheme" since going public with a short position in 2012.