Chapman Says You Should Own Herbalife Even In The Low $60s (HLF)

Robert Chapman of Chapman Capital came onto CNBC to talk to Scott Wapner Wednesday afternoon about his position in Herbalife HLF.

Here are some highlights from the interview:

His Portfolio

• Herbalife constitutes the largest position of all his portfolios
• Some Clients have as much as 50 percent of their holdings in the company
• Bought in the low $40s and continues to hold

Why Does he Like Herbalife so Much?

• Only trading at roughly 15 times 2013 earnings of $5.00 per share

Get Started

Earn 7.2% — No Matter What the Fed Does

Markets expect rate cuts — but your earnings don’t have to suffer. Lock in 7.2% until 2028 from ten individual bonds.

Get Started

On Ackman:

• "Making Money in a stock is fun, but making money when Bill Ackman losing it is like a ride in the circus, but that's not why I'm long,"
• Does not believe Ackman has sold a single share of Herbalife
• Ackman made the best investment in the history of Wall Street by buying General Growth Properties GGP

Where is Herbalife Going?

• To $300 if it remains public
• Company had very tough comps- implying the market is heavily discounting it
• LBOs are in Herbalife's DNA
• At some point it will get LBO-ed, this could be five to 10 years down the road

Similarities to Philip Morris PM

• Similar to Phillip Morris 13 years ago
• Uses it as a template
• International spin off solution to an US regulatory problems

Herbalife shares rose slightly during the interview, and were up 7.84 percent to $64.73.