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Greenberg: New Year Report -- Herbalife and More

Tickers in this article: BDBD CAT CLH GMCR HLF ISRG MELI NSR NUAN PBPB RAX ULTA

SAN DIEGO ( TheStreet) -- With the new year under way, let's get started with a look ahead and an audit of stocks on my Watch List.

When you primarily fly red flags in an almost straight-up market -- which confuses brains in a bull market -- you just keep plowing ahead. I've been there, done that and doing it again.

As longtime readers know, I don't make stock calls. I point out risk. And I don't view a story as having been proven right or wrong just because a stock rises or falls yesterday, today or even last year. (For that reason, I think it's an absurd measurement to judge investment managers on performance in a single 12-month period, but I digress.) Many of these stories can take time -- sometimes a long time -- to play out. They're not calls on the stock, but on risk that can get in the way of a stock. Rising stocks, especially in indiscriminate bull markets, can paper over any number of risks -- until they don't.

Investors in Ulta Salon , for example, got a wake-up call earlier in December when its shares lost a quarter of their value in a single day on bad earnings news. Even so, I would argue, the risk of further disappointment continues.

Ulta has long been and continues as a company worthy of red flags -- and remains high on my Stock Watch list.

Among others on the list -- and a few updates:

Herbalife

What more can be said? Either Herbalife will do the mother of all buybacks, go private, do some kind of a recapitalization or ... nothing.

Whatever it does, this one will go down as one for the books.

Going private will make the controversy moot for public holders (but not investors in the deal). A big buyback won't.

After 10 months of reporting for my CNBC documentary  Selling the American Dream , I do know this: The multi-level marketing industry, Herbalife included, operates in what appears to be an undefined, gray, ambiguous area of FTC guidance that has escaped serious scrutiny.

From Herbalife's 10-K: "The regulatory requirements concerning network marketing programs do not include bright line rules and are inherently fact-based."

I also know this: The circus atmosphere surrounding the skyrocketing stock has nothing to do with, nor resolves, a number of serious questions. It serves more as a distraction and as long as the company remains public, or gets a clean bill of health from regulators, the risk remains.

One analyst notes, in a report Thursday, that because of the scrutiny, the company has been forced to improve policies, but that gets to the questions: Why? And have the changes removed, beyond any doubt, concerns about Herbalife's underlying model? I'll pack up and go away on this one after regulators and/or courts weigh in -- if they ever do.