The Zacks Analyst Blog Highlights:Facebook, Yahoo, Google, Herbalife and Nu Skin

Jan 30, 2014, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Jan. 30, 2014 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Facebook (Nasdaq:FB-Free Report), Yahoo (Nasdaq:YHOO-Free Report), Google (Nasdaq:GOOG-Free Report), Herbalife Ltd. (NYSE: HLF-Free Report) and Nu Skin Enterprises Inc (NYSE: NUS-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Facebook Posts Big Growth on 10th Anniversary

Social media giant Facebook (Nasdaq:FB-Free Report) began, as now everyone on earth knows, in a dorm room at Harvard University ten years ago. Today, as if celebrating its 10th anniversary, the company posted impressively gaudy growth numbers -- not only $2.59 billion in revenues for the quarter (up 63% year over year and easily topping the Zacks Consensus Estimate of $2.36 billion), but also things like Monthly Mobile Active Users (MAUs), which reached a pretty astounding figure of 945 million. That's closing in on a billion monthly users of Facebook -- on mobile devices alone!

Earnings per share were close to in-line with our expectations (as Zacks includes charges like stock-based compensation), but the real story is the success of Facebook's monetization of its mobile ad revenue, which now makes up 53% of Facebook's total business. A year ago it made up only 23%. Especially compared with mobile ad monetization struggles from companies like Yahoo (Nasdaq:YHOO-Free Report), which reported Tuesday, Facebook's accomplishments in its 4th quarter are even more impressive. Small wonder FB shares are up 9% in the after-market.

So Facebook stock is now off to the races with new all-time highs, and the company had already gained 44% since its relative face-plant of an IPO back in the spring of 2012. Seems like forever ago now, doesn't it?

As far as reports having coming out that "kids never use" Facebook anymore, obviously the company is doing something right. Less than half of Facebook's revenues come from the U.S. anymore, and there is plenty of international growth potential out there for the taking, especially in Asia. Currently, worldwide average revenue per user is $2.14, which is up 20% since the previous quarter.

And to whatever extent it's true Facebook has "lost" some young people who don't want to discuss what they're doing while their grandma searches for baby pictures on their page -- and it could be argued systems like Google+ (Nasdaq:GOOG-Free Report) may be able to take some share here -- with the growth and market-cap acceleration Facebook currently displays, the company should be able to acquire their way back into most if not all realms of social media. Happy anniversary, Facebook!

Canadian Regulators to Probe Herbalife

Accusations and investigations continue to haunt Herbalife Ltd. (NYSE: HLF-Free Report). As per a report by New York Post, the Canadian Competition Bureau has announced a formal investigation into the pyramid scheme business model complaints against the company. In a pyramid scheme business model, deceptive marketing practices are employed for improving business. Shares of this nutritionist company fell 2.4% yesterday after the news.

This inquiry by Canadian regulators adds to the woes of the company. It was recently charged by a U.S. Senator last week who wrote to the U.S. Securities and Exchange Commission and the Federal Trade Commission to look into Herbalife's operations. Earlier too, First Financial Daily, a Chinese newspaper, suspected that Herbalife in China was adopting illegal marketing practices.

China also opened an investigation on Nu Skin Enterprises Inc (NYSE: NUS-Free Report), which sells personal care products and nutrition supplements following claims by local newspaper, People's Daily (on Jan 15) that the company was operating an illegal pyramid scheme in the country. This news raised concerns for Herbalife as well, as both the companies run a similar business model.

Herbalife has been denying the charge since 2012 when activist investor William Bill Ackman (hedge fund manager of Pershing Square) and the Belgian consumer organization Test-Aankoop accused the company of running a pyramid scheme business model. The company was accused of making money by recruiting new sales people and not from its sales. However, on Dec 3, 2013, a Belgian court quashed the allegations and stated that the company's sales model complied with Belgian law.

Nevertheless, Ackman sent a letter to its investors on Dec 24 about the improper recruiting methods adopted by HerbalLife. The billionaire investor also told his clients that Herbalife is likely violating multi-level market restrictions in China.

Herbalife, on the other hand, has come out clean when in Dec 2013, Herbalife's U.K.-based auditor, PricewaterhouseCoopers (PwC), completed the re-audit of more than three years of financial statements and found no material changes. The re-audit was done post PwC's appointment as its new independent auditor. Herbalife's former independent auditor, KPMG LLP ('KPMG') resigned in May following insider trading allegations against an executive of the accounting firm and not owing to any discrepancies in Herbalife's financial statements or its accounting practices. Herbalife holds a Zacks Rank #1 (Strong Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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