Feb. 3 - Shares of Herbalife, the controversial nutrition supplement company, rose after raising its profit and sales outlook. Bobbi Rebell reports.
A healthy outlook for nutrition and weight loss company Herbalife, which has been the subject of a very public feud among activist investors. It says its fourth quarter profits and sales will be above analysts' estimates- and also confirmed its 2014 forecast. Herbalife also boosted its share repurchase program- and said it's going to raise a billion dollars through a convertible note issue. Investors liked that- the news lifting its stock- which is down 18 percent so far in 2014. Wedbush analyst Rommel Dionisio has an outperform and a $90 target on the stock. He told me quote: "Core fundamental momentum of the business is as strong as ever, having posted yet another upside surprise in the fourth quarter. The fact that they are maintaining guidance for 2014 in the face of adverse currency impacts, given exchange rate fluctuations of the last few weeks is a further indication that the core business is as strong as ever." The news- a bit of a setback for activist investor Bill Ackman- he's been betting heavily against the company- and said as recently as last week that he was sticking by his billion dollar short position. But it's a good day for those on the other side- like Carl Icahn and George Soros. Icahn is Herbalife's biggest shareholder with an almost 17 percent stake as of the most recent filings. The big controversy- naysayers say it's a pyramid scheme- focusing more on recruiting sales people than selling to outside customers- a charge the company denies.