One of the most talked-about stocks over the last year, in both positive and negative ways, has been Herbalife (HLF 2.91%). These accusations included claims that the company was a pyramid scheme and claims of accounting irregularities, but the brand has fought forward and the company has just released its fourth-quarter results. The quarterly release was another record-setter and it was the final puzzle piece that finished off the best year in the company's history. Let's take a look at the results and figure out where Herbalife could go from here.

Source: Herbalife

Four record-setting quarters
Herbalife's four quarterly reports in fiscal 2013 all set records for the company, which shows the growing popularity of the brand worldwide. Here's an overview of the results from each quarterly report in comparison with what analysts were expecting, as well as the growth from the same periods in the prior year:

First Quarter:

Metric Reported Expected Year-Over-Year Growth
Earnings Per Share $1.10 $1.07 25%
Revenue $1.12 billion $1.12 billion 16.5%

Second Quarter:

Metric Reported Expected Year-Over-Year Growth
Earnings Per Share $1.41 $1.18 29.4%
Revenue $1.22 billion $1.16 billion 18.2%

Third Quarter:

Metric Reported Expected Year-Over-Year Growth
Earnings Per Share $1.41 $1.14 43.9%
Revenue $1.21 billion $1.2 billion 19.3%

Fourth Quarter:

Metric Reported Expected Year-Over-Year Growth
Earnings Per Share $1.28 $1.25 28%
Revenue $1.27 billion $1.25 billion 19.8%

Adjusted earnings per share increased 36% and revenue increased 18.5% for the full year from fiscal 2012. This strong performance was highlighted by sales growth in all six of Herbalife's regions, led by 69.3% growth in China and 41.3% growth in South and Central America.

Additionally, the company noted that it generated $772.9 million in free cash flow during the year, which it used to pay $123.1 million in dividends, repurchase $297.4 million of its common stock, and invest $162.5 million to grow its business; this is the ideal use of free cash flow, which shows that Herbalife is truly dedicated to maximizing shareholder value. Overall, it was a record-setting year for Herbalife and its outlook on fiscal 2014 predicts that the company will set even more records.

Outlook on the year
In its fourth-quarter report, Herbalife also provided guidance for the fiscal year ahead. Here's the company's earnings per share expectation versus the consensus analyst estimate:

Metric Herbalife's Outlook Analyst Estimate
Earnings Per Share $5.85-$6.05 $5.87

The midpoint of Herbalife's outlook was $5.95, which came in well above analysts' expectations. In addition, the company said that it expects revenue growth of 7.5%-9.5% on volume growth of 6.5%-8.5%. This would result in yet another record year for Herbalife, but it is important to note that Herbalife has exceeded expectations in 20 consecutive quarters and raised its outlook in every quarterly report released in 2013.

This leads one to believe that Herbalife is using the "under-promise and over-deliver" method of forecasting so it can continue to exceed estimates and slowly raise its outlook throughout the year; it is the cautious way to go about forecasting, but it has worked for Herbalife for many years, so there is no reason to change up the routine now.

Where could it go from here?
According to YCharts, Herbalife has a five-year average price-to-earnings multiple of 13.9 and this statistic reached a high of about 17 during 2013. Based on the company's current earnings per share outlook of $5.85-$6.05, if it were to continue trading at its average multiple, Herbalife's stock could trade up in the range of $81.32-$84.10; if it were to reach the high multiple of 17, this would place Herbalife's shares around $99.45-$102.85.

Both of these ranges represent substantial upside from today's levels, not to mention the possibility and likelihood of the company's earnings coming in well above the current projected range. A performance like this could well outperform the overall market and make Herbalife a top stock to own from here on out.

Not many threats to its rise
As Herbalife exceeded expectations and handed over better-than-expected guidance, GNC (GNC) did the opposite and Nu Skin (NUS 2.44%) remained in the crosshairs of the Chinese government. Let's take a deeper look into these two companies and see if either could regain strength and pose a threat in 2014.

Source: GNC

To start, GNC released its fourth-quarter report after the market closed on Feb. 13. Here's what it accomplished during the quarter:

Metric Reported Expected
Earnings Per Share $0.50 $0.64
Revenue $613.70 million $631.51 million

GNC's earnings per share increased by 6.4% and revenue increased by 8.6%, which widely missed analyst expectations on both lines. To make things worse, the company then handed over its outlook for 2014, calling for earnings per share in the range of $3.18-$3.24 when analysts wanted to hear $3.46. GNC's CEO described the fourth quarter and first two months of 2014 as "very challenging," which caused the earnings miss and weak outlook. All of this sent the stock tumbling over 14% in the next trading session; it has slowly risen since, but the shares could remain weak for the remainder of the year. I would avoid this one until the next quarterly report to see if it can get back on track and note a strengthening consumer. With this said, I think GNC's weakness is Herbalife's gain.

Source: Nu Skin

Nu Skin's issues began on Jan. 15 after the People's Daily, a communist newspaper in China, published a story accusing the company of operating as an "illegal pyramid scheme." This caused a one-day drop of 15.56% in the stock price, but Nu Skin responded to the allegations by saying they were inaccurate and exaggerated. However, things got worse in the following day, when it was announced that Chinese authorities were investigating Nu Skin for illegal business practices. Authorities elaborated on this by accusing Nu Skin of making false promises to draw in new clients as distributors and seconded the People's Daily accusation of the company being a pyramid scheme. 

Today, Nu Skin sits over 40% from its 52-week high and it will likely remain weak until the investigation is complete. This issue has also caused weakness in Herbalife because its business model is very similar, but Herbalife's decline has been contained by strong earnings and bullish sentiment from analysts. Foolish investors should steer clear of Nu Skin until Chinese officials reach a conclusion in their investigation and then use the information provided to make an educated decision about whether to invest in the company.

The Foolish bottom line
Herbalife's year was one for the record books and the company will continue to build on top of this success. Its outlook on 2014 could propel its shares much higher and the company will return additional cash to shareholders via its healthy 1.8% dividend and share repurchases.

Investors looking for exposure to the growing nutritional-products industry should look to Herbalife over any of its competitors, as its potential is much greater than that of others in the industry which have struggled as of late. Herbalife has shown weakness after its recent fourth-quarter earnings beat, so Foolish investors should look to pick up positions on any further weakness and hold on to them for the long-term.