Q: Declining debt and higher margin for its products: Do you think this company would be a takeover target? Clearwater went that way a number of years ago. I also noticed a very high volume trade day (almost 10X normal volume) on December 19, 2024. Pays a dividend of 4.4%.
5i Research Answer:
Dec 19 trading included a block of nearly 500,000 shares, and only five holders have that much. But only two of those have enough to require disclosure, and no disclosure has been forthcoming so we would not read too much into this. The stock is very cheap at 7X earnings. There has been very little news for months now. Thornbridge owns 39% and we are not sure it would want to sell at current levels, even with a big premium. Debt has declined nicely and is now less than 2X cash flow. 15% growth is expected this year. HLF also has a share buyback in place. The dividend was raised in November. All-in, it is cheap, and there are some improvements occurring. It remains small and cyclical, and we would like to see debt even lower.