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Public M.L.M. Companies: HerbaLife (HLF) and Mannatech (MTEX)

October 14, 2007 | About:
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Jonathan D. Poland

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It's official, MLM companies have gone public.

From Amway to Pre-Paid Legal (PPD), network marketing businesses are multi-billion dollar global empires in today's age of information.

Two in the "Health/Drug related products" business strike me with more enthusiasm. Being healthy is not something new, but it has become something necessary. With kids today obscenely out of shape and more and more drugs on the market for weight control, diabetes, and other problematic health related illness, it has become vital that America gets its butt back in shape. In fact, two companies are at the forefront of nutritional products for wellness:

HerbaLife (HLF) and Mannatech (MTEX)

Each company has a global reach and attractive stock valuation, but which one is more undervalued?

Company

MTEX

 

HLF

         

10.12.2007

$9.06

 

$45.50

         

Market Value (mil)

$211.20

 

$3,150.00

Debt (mil.)

$0.35

 

$215.83

CASH

$38.19

 

$147.04

Total Capitalization (mil.)

$173.36

 

$3,210.00

Book Value

$3.36

 

$4.46

Sales (mil.)

$410.07

 

$2,000.00

Net Income (mil.)

$32.39

 

$157.00

         

Earned Per Share

     
 

Current EPS

$1.19

 

$2.11

 

2007 Estimate

$1.30

 

$2.58

 

2002 EPS

$0.07

 

$0.46

 

1997 EPS

$0.47

 

n/a

         

Current Dividend

$0.36

 

$0.40

         

Ratios

     
 

Forward P/E

6.97

 

17.64

 

Price/Book

269.64%

 

1020.64%

 

Dividend/EPS

27.69%

 

15.50%

 

Net Profit Margin

7.90%

 

7.85%

 

EPS/Book

35.42%

 

47.33%

         

Growth in EPS

     
 

5 Year Growth

1600.00%

 

358.70%

 

10 Year Growth

153.19%

 

n/a

         
 

Return on Total Capitalization

18.68%

 

4.89%

Will these products help America get its shapely figure back or will we become allergic to even more foods I hope so! And, whether the next big MLM idea will turn into a Mannatech or HerbaLife has yet to be determined, but these two businesses will be around for a while.

About the author:

Jonathan D. Poland
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.0/5 (19 votes)

Comments

hameed
Hameed - 6 years ago
MannaTech also happens to be a Magic Formula pick. A combination of high earnings yeild and high return on capital.

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