According to a Schedule 13G, Indus Capital Partners LLC, founded by David Kowitz and Sheldon Kasowitz, currently owns 7.32 million shares of Herbalife Ltd. (NYSE:HLF), which make up 7.9% of the company’s outstanding common stock. The investment firm owned 2.21 million shares of common stock and call options underlying 1.68 million shares of Herbalife at the end of September. The nutrition company that markets weight management, targeted nutrition, energy, sports and fitness, and outdoors nutrition products has seen its shares advance by 48% over the past year. However, the stock has embarked on a steady downtrend since the beginning of 2016, which has pushed the company’s price-to-earnings multiples significantly lower. The stock trades at a forward P/E ratio of 9.61, which is well below the average of 15.48 for the S&P 500 Index. The question many investors might ask is whether the company deserves a higher multiple, so let’s take a brief look at Herbalife’s recent financial performance.
Herbalife reported net sales of $3.37 billion for the first nine months of 2015, down by $454.4 million or 11.9% year-over-year. The strong U.S dollar and a decline in sales volume stand behind the decline in the company’s top-line results. Meanwhile, the company’s net income totaled $254.6 million or $2.99 per diluted share, which was up by 24% year-over-year. So does Herbalife Ltd. (NYSE:HLF) deserve a higher valuation? The soon-to-be released earnings report for the fourth quarter of 2015 might provide a clearer answer to the preceding question. 32 hedge funds from our system had stakes in the company at the end of the September quarter, accumulating 33.10% of its shares. Billionaire Carl Icahn of Icahn Capital LP holds a 17.00 million-share position in Herbalife Ltd. (NYSE:HLF) as of the end of September.
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In a freshly-amended 13D filing, Bulldog Investors LLC, founded by Phillip Goldstein, Andrew Dakos, and Steven Samuels, reported owning 3.94 million shares of Hill International Inc. (NYSE:HIL), which constitute 7.64% of the company’s shares. It is important to note that the investment firm did not sell or purchase any shares of Hill since the fund filed its previous 13D on the company in December. However, the hedge fund firm revealed in the latest filing that is sent a letter to the company’s Board of Directors, expressing its discontent with the actions of the company’s General Counsel, Bill Dengler. Long story short, Bulldog Investors intends to nominate directors for the company’s 2016 annual meeting, but the General Counsel has refused to assist the investment firm through the process of nominating directors, saying that “it is your burden and responsibility to comply with the advance notice and other requirements of Hill’s bylaws. Neither I nor anyone else at Hill has any duty, fiduciary or otherwise, to advise you through the process”. However, it appears that Hill International Inc. (NYSE:HIL) has a duty to conduct a fair corporate election, and “those in charge of the election machinery of a corporation must be held to the highest standards in providing for and conducting corporate elections”.
The shares of the professional services firm have lost 18% over the past one-year period, so the company might need to be shaken up a bit so as to inject new dynamism. It should be noted that the company has a forward P/E multiple of 8.24, so the stock might represent a real bargain at the moment, if operational efficiency can be improved. Charles Paquelet’s Skylands Capital owns 923,316 shares of Hill International Inc. (NYSE:HIL) as of the end of the third quarter.
