Out of the Gate: Herbalife shares rise

Herbalife shares rise after SEC investigation ends; analyst sees improving investor mood
June 26, 2008: 10:19 AM EST


NEW YORK (Associated Press) - Shares of Herbalife Ltd. rose Thursday after the company, which sells nutritional supplements and weight-loss products, said the Los Angeles office of the Securities and Exchange Commission will not recommend enforcement action to the broader agency.


The stock gained 81 cents, or 2.1 percent, to $38.87 after the opening bell.

The SEC investigation was related to the timing of securities trades by a former employee and the extent of personal use of Herbalife products by the company's distributors.

"Investor sentiment ... should meaningfully improve following the closure of the SEC investigation," Goldman Sachs analyst Simeon Gutman said in a note to clients.

Gutman rates shares "Buy" with a $57 price target, implying he expects the stock to rise 50 percent above Wednesday's $38.06 close.