Juan Mendoza, a director at Herbalife (HLF), recently bought 10,000 shares. The buy came to a total cost of $71,100, and increased his stake by 8.3%.
This follows up on several other buys made by the director so far this year, including two pickups in August for over 16,700 shares, and some pickups in May for nearly 18,000 shares. Over the past two years, insiders and officers have been buyers of shares, with a mix of those buys coming from stock awards.
Overall, Herbalife insiders own 1.8% of shares.
The health and wellness producer has seen shares slide by 53% over the past year. Earnings are down by 92%, and revenues are off by 3%.
Even with that decline, the stock is inexpensive at less than 4 times forward earnings, and trading at a low 0.15 times its price to sales.
Herbalife is heavily indebted, with nearly $3 billion in net debt against a market cap of about $700 million. The company may be able to refinance at better rates as interest rates decline.
Action to take: Shares are in a downtrend and are near a 52-week low. Interested investors can likely get a better price on the stock over the coming months and should wait for signs of a turnaround before buying.
For traders, the November $7.50 puts are an at-the-money trade. Last going for about $1.20, they could see mid-double-digit returns on a further decline over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.