Earth to Herbalife: Go Private By Michael Comeau About this article: Herbalife must be quite an annoying stock to own. The company consistently beats analysts' earnings estimates and guides up, has a 1.9% dividend yield, generates huge free cash flow and trades at a dirt-cheap valuation. However, while the fundamentals themselves are fantastic, the company's controversial business model makes it an entity that should no longer be public. On its Web site, Herbalife describes itself as "a leading global nutrition and direct selling company offering a range of science-based weight management products, nutritional supplements and personal care products ("Outer Nutrition") to support weight management and a healthy lifestyle." In other words, Herbalife sells nutritional products to people who wish to run their own small businesses selling those products to others. In addition, those sellers recruit people to sell under them, getting a cut of the profits. Now here's where the problem comes in. People sometimes view direct-selling companies... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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