Canaccord analysts Scott Van Winkle and Mark Sigal look at Herbalife with a positive light, seeing a business model with few inefficiencies.  They have a Buy rating on Herbalife Ltd. (NYSE:HLF)’s stock.

herbalife LTD HLF

Investment recommendation

We believe Herbalife Ltd. (NYSE:HLF)’s efficient business model along with deployment of its daily consumption models globally will continue to drive double-digit revenue and earnings growth.

Investment highlights

* Adjusted Q4 EPS expected ~10% above the Street, with sales and volume point growth consistent sequentially. Reiterated F2014 volume point and EPS guidance, but currency will impact revenue. Guided Q1 EPS below consensus on $0.20/share unfavorable currency impact.

* Trends remain very consistent, with volume growth in 13% range. We expect this implies continued strength in China, Europe and both N. America and C/S America again in Q4.

* Announced $1B offering of convertible notes and a share repurchase to follow. Size is consistent with our expectations.

* Raising Q4 rev/EPS estimates to $1.27B/$1.29 from $1.22B/$1.15. 2014E EPS unchanged at $5.65, while revenue reduced a touch for currency. Volume growth estimate unchanged.

* At 11x our forward EPS estimate, Herbalife Ltd. (NYSE:HLF) shares are again at a measurable discount to peers and below historical averages.