3 Growing Health-Focused Direct Marketing Companies
The direct marketing industry has been in the spotlight over the past year mainly because of the battle between Carl Icahn and Bill Ackman over the future prospects of Herbalife (NYSE:HLF). Bill Ackman is well-documented as being on the short side while Carl Icahn remains firmly behind the company. Thus far, Carl Icahn has been a clear winner. Several companies in this industry, including Herbalife, are demonstrating that strong earnings are what’s important. Three health-focused direct marketing companies that investors may want to consider are Herbalife, ForeverGreen Worldwide Corporation (FVRG.PK), and USANA Health Sciences (NYSE:USNA).
Herbalife is a global nutrition and weight management company. The company’s products are sold exclusively by almost 2.3 million independent distributors around the world. The company’s product focus is on nutrition, weight management, and personal care. Based on the company’s third quarter earnings report, Herbalife generates roughly 64 percent of its revenue from its weight management products. About 23 percent of the company’s sales came from targeted nutrition products.
Fundamentally speaking, Herbalife has demonstrated strong growth over the past 3 years. Here is a look at the company’s net sales and net income since 2010.
- December 31, 2010: $2.73 billion in sales and $292.88 million net income
- December 31, 2011: $3.45 billion in sales and $414.96 million net income
- December 31, 2012: $4.07 billion in sales and $463.96 million net income
As investors can see, the sales and net income growth have been impressive and consistent. This strong fundamental performance has resulted in a 42 percent rise in Herbalife’s share price over the past 52 weeks. The recent sell-off because of a possible Senate inquiry into Herbalife represents an excellent opportunity for investors to acquire shares. Carl Icahn has gone on the record as saying that he hasn’t sold a single share.