The base attitude of an investor is usually a positive, optimistic one (not talking of a s/t trader or shorter). This type of investor is likely to see the positive 'spin' on announcements and data. However, I believe that when it comes to investing: optimism should be mightily tempered by a good dose of cynicism. ... and this leads us straight to HLF.
None of the carefully planted hopes and expectations that goaded holders into holding have come through. Steadily increased revenue has been bought by expending equity and successive CRs, then topped up by debt and more CR recently to buy a conduit for more revenue. The longer this goes on the higher the discount at a CR and a further erosion of the SP - now being 9% below the cash raising price.
HLF reminds me of a song by Joni Mitchell: I have seen both sides now ... and "ice cream castles in the air".
Directors buying at the recent CR was clearly a waste of about 9% of their money; they all could have gotten their allotments cheaper at the open market. When they were bullish then, why don't they load up now? It is way cheaper now, guys! ... ah, here goes the cynicism.
I have sold 50% some weeks ago, and more today, and now only hold a notional amount. HLF used to announce with a regularity (somewhat) the wins of new contracts; but there has been very little or next to nothing for some time now. I suspect there is a problem with money coming through the door; in other words a bottleneck situation in the cash flow. My guess is, that management knew this for a while, since they were happy to arrange for a scheme that halved the then SP of 13 cents in order to keep doing business and acquire a business that is highly profitable (on past guidance). Although, I think, I have heard this before...
The 4C report will be out any day soon. No announcements have been made in the meantime re new or renewed contracts. The cynicist says: No news is bad news. The poor performance of HLF is only being matched by poor Investor Relations.
Since I sold today, I change my sentiment to sell.
GLTAH
HLF Price at posting:
6.3¢ Sentiment: Sell Disclosure: Held
