THE CASE FOR HERBALIFE (NYSE: HLF) BEING LITTLE MORE THAN A SHIPPING AND HANDLING COST MARKUP SCHEME
Fund Manager Matthew Handley takes a closer look at Herbalife's 2013 10k.
A 30% markup sounds fair. Maybe 60% tops.... when thinking about a Corporations Shipping and Handling Revenues, particularly when costs are passed back to parties trying to resell their product, one expects the Shipping and Handling Revenues to reflect some reasonable markup on the actual costs that the Corporation incurs.
This expectation might lead one to consider a 30% markup as reasonable, perhaps at the far extreme for example, even a 60% markup.
However, in the case of Herbalife...
Furthermore....It appears Herbalife has marked up the actual costs it incurred for Shipping and Handling in 2008, 2009 and 2010 by 581%, 575% and 584% respectively.
Red Flags In Herbalife's Shipping And Handling Revenues... they may well have marked up the actual costs they incurred for Shipping and Handling in 2011 - 2014 (3 quarters) by, 711%, 704%, 611% and 363% respectively.
Not an easy read - guaranteed to cure insomnia - but highly informative.
Bend over and touch your toes, Herbalife distributors, Michael Johnson loves ya!