Herbalife Ltd. (HLF) Is a Risky Investment

Vitamin Shoppe Inc (NYSE:VSI) relies heavily on promotions and social media. In order to broaden its exposure, Vitamin Shoppe acquired Super Supplements late last year. This led to increased costs, which then affected earnings and hurt the stock price.

Vitamin Shoppe Inc (NYSE:VSI) plans on opening approximately 50 stores this year, which is a sign that management is optimistic about the company’s future prospects. But online stats for Vitaminshoppe.com haven’t been good of late. According to Alexa.com, page-views per user and time-on-site have declined 18.73% and 13%, respectively, over the past three months. This isn’t a guarantee that online sales have slowed, but it’s certainly not positive.

Vitamin Shoppe Inc (NYSE:VSI) should be fine over the long haul as it’s selling products that cater to consumer demands. Plus, Vitamin Shoppe’s debt management has been superb, which will help the company weather economic storms. That said, this doesn’t look to be an ideal time to invest.

Conclusion

All three companies are selling products that are in high demand. However, all three companies come with concerns, and Herbalife Ltd. (NYSE:HLF) looks to be the most concerning.

While it’s very possible for Herbalife Ltd. (NYSE:HLF) to continue to perform well, even over the long haul, the downside risks are extraordinarily high. Herbalife isn’t recommended as you can find other high-reward options that don’t have as much downside risk.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool has the following options: long January 2014 $50 calls on Herbalife Ltd. (NYSE:HLF).

The article Herbalife Is a Risky Investment originally appeared on Fool.com.

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