10 Best Food Stocks To Buy Under $20

1. Herbalife Ltd. (NYSE:HLF)

Stock Price: $5.30

Number of Hedge Fund Holders: 32

Herbalife Ltd. (NYSE:HLF) is a global nutrition company that offers protein shakes, meal replacements such as soups and bars, high-protein snacks, teas, sports nutrition, and vitamins and supplements. It specializes in targeted nutrition, sports and fitness, energy, and weight management. Its snack portfolio comprises a range of savory, sweet, and creamy options, including snack shakes, high-protein iced coffee, soups, protein bars, and baking mixes. Herbalife Ltd. (NYSE:HLF) also manages a portfolio of dietary supplements, which includes solutions for digestive health, heart health, immunity, and more. The company sells its products in around 95 markets across the globe.

Its fiscal Q3 2024 results showed a 3.2% year-over-year drop in net sales to $1.2 billion, driven primarily by FX headwinds. Adjusted EBITDA stood at $167 million, with a margin of 13.4%, and exceeded the guidance range of $125 million to $155 million. Its reported EPS for the quarter was 57 cents, which beat expectations of 35 cents. The company is seeing substantial growth in new distributor members, a 14% increase from last year. This was the second consecutive quarter of year-over-year improvement. The surge was attributed to successful new initiatives to expand the brand’s market reach.

Strong cash generation has allowed Herbalife Ltd. (NYSE:HLF) to make significant progress in debt reduction. In fiscal Q3 2024, it had an operating cash flow of $100 million, of which $85 million was used to pay down debt, reducing the total leverage ratio to 3.3x. The move is part of the company’s overall strategy to lower its debt by $1 billion within five years.

Overall, HLF ranks first among the 10 best food stocks to buy under $20. While we acknowledge the potential of food stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HLF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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