Sometimes the 52-week-high list is a good place to mine for strong ideas, if you can find some that don't do poorly if oil goes still higher.
I think we all have to accept that we must put stocks through the oil prism now because numbers are too high across the board for every company that reported so far this year that has energy as a key component in their input costs.
But last night I interviewed an extraordinary CEO, Michael Johnson, who runs Herbalife (HLF), a new-high denizen, and the story does not run on oil, it runs on people and it is getting stronger by the day.
If you don't know Herbalife, you most likely think that it is one of those direct selling companies that is one step away from being a multi-level marketing scam.
That's why you need to know Johnson. He felt the same way when he came in to Herbalife, where he has delivered about the best performance that you have never heard of during his tenure.
Johnson realized something that always seems to elude people in this industry, including the Fuller Brush company that filed bankruptcy yesterday. You do not knock on peoples' doors and sell them so-so products that they don't really need and think you can have success simply by giving salespeople outrageous incentives to get other salespeople to take product no one wants.
He undid the model. He decided that Herbalife would sell energy supplements and drinks and meal replacements that would actually be tested by actual outside labs and would be LIKED by customers. I know, that sounds totally facetious, but believe me when I say that it isn't.
Then he changed the selling model to one of clubs, introducing Herbalife as a method of one on one and group connection, a model that works incredibly well in lesser-developed countries where advertising doesn't have as much clout.
Finally, he incentivized people at the right pace so that they don't willy-nilly recruit and jam inferior product down peoples' throats, which ultimately leads to the accounting scandals we associate with the direct selling model.
You saw the results yesterday.
But let me add this. Not that long ago Herbalife was under assault by a guy named Barry Minkow for doing the kind of horrid direct selling that Johnson has railed against and eliminated years ago. It was the type of get-short-get-loud-start-lying stuff that we all hate. Most companies wouldn't stand up to this kind of bullying and would stand behind lawyers and say nothing.
Not Johnson. He wanted on the show,. He told people that Minkow was dead wrong. That HLF stood for the exact opposite.
It was an amazing buying opportunity.
Now Minkow's in jail. HLF's on the 52-week-high list.
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