Herbalife Nutrition stock has upside potential in 2019 on increasing volume

As the 2019 trading season starts revving up, many traders and investors are working on formulating their investment plans for the rest of the year. One stock which has been receiving significant attention as of late is Herbalife. Analysts on average are predicting that HLF will reach $62.60 within the next 12 months. This would be a 7.52% move to the upside following a -1.24% downtrend starting the beginning of this year.

Volume to drive growth for HLF in 2019

Part of the reason that analysts believe Herbalife stock price is set to gain overall in 2019 is due to the expectation of increasing sales volume. This would continue a trend from 2018 which showed significant growth in sales volume which surpassed management’s projections in the third quarter of 2018. During this time period volume points increased 15% to 1,506.9 million which is the largest volume points growth year-over-year since 2012. Also sales volume showed double-digit growth within four of the five major markets for two quarters in a row.

Herbalife will capitalize on strong brand recognition

One of the main reasons for this increase in growth is the company’s strategy to keep a beat on changing consumer preferences and combining new products with an effective and proven direct sales business model. The company, during the third quarter of 2018, released 58 new products in more than 50 countries. With Herbalife products now available in over 94 countries across the globe, the company has gained strong brand recognition in the market which works perfectly with its direct sales business model. Due to many consumers having already been aware of Herbalife products without necessarily trying the product, the brand recognition will help to streamline the sales process for independent representatives and salespersons.

Direct sales model will bring repeat business

Another advantage of Herbalife’s direct sales business model is that this type of sales strategy emphasizes dealing with customers in a personal and direct way. Usually, independent salespersons will utilize their already-existent social networks to close sales. Therefore, salespersons will already have a certain level of trust and rapport with the customers. This can help make the products more appealing while also increasing the likelihood of repeat business.

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