Is NutriSystem the Biggest Loser?
There is a special situation you all need to monitor. There is something going on with NutriSystem (NTRI) and I'm not sure what it is. NutriSystem is a provider of weight management products and services. They offer an at-home weight loss program based on portion-controlled, lower Glycemic Index prepared meals, weight loss plans, and private telephone and online support. Well that's the company's line anyway.
What they really offer is a hope and a prayer and maybe a shoulder to cry on. I don't think there is a person in America that doesn't understand that if you want to loss weight you just need to eat less and exercise more but their ads tell you otherwise. They offer the promise of success. So do the analysts following this stock.
The more analysts that jump on board this stock the lower the price goes. There will be a profit to be made here for those that know what they are doing and are nimble enough to execute the proper trades.
Analysts have 3 buy ratings out there and Zacks recently came out with a strong buy. The consensus is that sales will grow by 13.2% next year and earning by a whopping 56.6%, Estimates of a 5 year compounded growth rate of 16% make this a stock to watch.
On some sites like Wall Street Survivor their readers give the stock a 5/5 Survivor Sentiment rating. On Motley Fool the CAPS members think the stock will out perform the market with a vote of 815 to 97 and the All Stars have a similar vote of 215 to 23.
So why aren't I on board with the rest of the world? Barchart has this stock rated as a short term sell. The stock has lost value in 11 of the last 20 trading sessions and is down 28.07% in the last 20 sessions. This is why I'm not following the rest of the lemmings. Here's my recommendation:
I think the stock has promise. Watch the price carefully and buy on the dip. Place a protective stop loss very closely on your position in case the pundits are wrong.
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides.
Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: No positions in NTRI at the time of publication