NutriSystem, Inc. (NTRI)

Lets look at the facts about Nutrisystem and how it's beneficial.

1. Health kicks are at an all time high. The "Hollywood Body" is fashionably in. Studies that show that heart disease (caused by high chloresterol/fat diets) also aid the cause of a healthy meal company.

2. It costs 329.95 for a basic plan with auto-delivery. That turns out to be roughly $12 dollars a day. That is roughly on par with what you pay when buying food at a food store.

3. Though insignifcant as it may seem, you don't have to drive to and from a store/fast food/regular restaurant. That will help when gas prices start to rise again (and they will, it's inevitable).

4. You know what you are getting. Clean, healthy, ready to go food.

5. Smart advertisement. Uses big numbers on big name celebrities to send a strong message, "Our product works."

I believe wholey in this product. As a bodybuilder myself, I know that the biggest factor in your body is diet, and this is an amazing deal for those who need something a little more "user friendly" than Southbeach or Jenny Craig. No calorie counting neccesary. Just cook and eat, and lose some weight.

Since october its products have been sold at WalMart and walmart.com. Has great endorsement deals with guys that pull the guys into their market.

I like this one because:

Starting to sell Nutrisystem at Walmart.

Strong relative strength in a down market (10/28/09)

Philly Manager (to be showcased in World Series) lost a lot of weight using Nutrisystem.

Analysts have just started to upgrade.

A financial depression has a way of fixing national obesity, without relying on NutriSystem. It's called starvation.

Wall Mart will sale their products

Wow. Gettiing into Walmart is a pain on your life, but a wonderkind on the pocketbook. Merry Christmas.

There were 30 items in your list. Here they are in random order:

ITWO - 1 (3 Star)
SOLR - Already on list
AMED - 2 (2 Star)
NTRI - 3 (3 Star)
CBI - 4 (5 Star)
CYTK - 5 (2 Star)
FWLT - Already on list
USMO - Already on list
PTIE - 6 (5 Star)
ELNK
GTLS
JCOM
FIX
QCOR
KHD
PPD
UNTD
LO
VCLK
GIGM
EME
FRX
ENDP
DIVX
EXBD
TRA
VM
DLX
INT
PRIM
Timestamp: 2009-09-08 19:37:25 UTC

good company with good earning

Obesity is an epedemic in the US. Nutrisystem has fantastic marketing that appeals to men and women. Little debt and strong dividend.

Lack of repeat customers. Only hope is to move into grocery stores and compete with the rest of the processed commodities.

PEG = 0.65

I've got about 4 reasons including personal experience why this company and stock are a fantastic value.

1. I am currently using their meal plan and in under 20 days I have gone from 234 pounds to 218 without any excercise and without starving. The customer service is excellent, the shipping is lightning fast, and they immediately rope you into a 2 month commitment to get the best rate. The food is decent, and packaged attractively.

2. The marketing. This system is marketed brilliantly. The put ads on ESPN2 at 1 am with Dan Marino and Mike Ditka showing men that it is masculine and effective to use their plan. No other diet program comes close to tapping into this huge market.

3. Today's drop. The stock dropped on news about three or four million in one time charges and from closing a failed investment. These charges will result in about twice as much pre-tax savings. They also offered quarterly guidance of 26-30 cents a share earnings this quarter. Even if they just earn $1 per share this year that puts them at a PE ratio of app. 14, which is low for the industry. I would imagine that 2010-2011 they'll be earning close to what they were doing in 2007.... roughly $2.50 a share.... that would be a 5.6 PE or something of that effect... Let's say the shares trade up to 15X earnings in 2010.... $35-40 a share easy.

4. Growth. I've heard various theories and growth projections, but as long as this company is tapping in america's fat ass, and circumventing certain compeitors by engaging the male market primarily, they will grow. When the economy recovers and jobs start coming back, people are going to get off the couch, and try and lose some weight before getting a new suit and a job. Nutrisystem is also placing it's product in Costco which is just brilliant in my opinion being a costco employee.

Fortune 40

With 65% of Americans overweight this undervalued company is not hurting for business. NTRI is also expanding internationally.

The new diabetic diet is going to be huge!

Quick test of a comparison on theory of finding bargains when the PE is below the growth rate.

Presently in a good shape and has a lot of room to move up. Insiders hold 14% of the company, no debt and the company has a lot of free cash flow.

The analysis presented is based on a current price of $14.32

I’m not certain whether NTRI’s EPS growth should be regarded as sustainable or a level shift. Certainly EPS has increased dramatically from $0.04 in 2001, but prior to 2005 the EPS was under $0.10, and in 2006 it shot up to $2.29 and increased again to $2.96 in 2007. Even in the recent trying times, NTRI has maintained EPS well with $1.86 in the trailing twelve months. The company has also maintained negligible to no debt for at least the last 8 years.

Before I look at the valuations, I look at three indicators of financial safety. For this stock, all three are quite good. The Altman Z is 21.86; below 1.8 is risky, above 3 is the safe range. The Piotroski F is 7; 2 or below indicates caution, while 8 or 9 indicates that the stock is expected to rise within the next year. The Sloan accrual is -5.23; 5 or higher is high risk, while -5 or lower is excellent.

I use more than one valuation method to gauge intrinsic value; all provide a substantial margin of safety (MOS). The first three are standards in the valuation literature. The estimate based on Graham’s formula was $81 (82% MOS). The Earnings Power Value (value of the firm) was estimated, on a per share bases, to be $34 (58% MOS). The Discounted Cash Flow estimate valued the stock at $29 (51% MOS).

The last two were based on a spreadsheet found on the AAII website; these are designed to mimic Buffett’s valuation methodology. One is based on projecting EPS growth 10 years into the future based on past EPS growth; I discount the resulting valuation to reflect the price at which the stock will realize a compounded earnings (including dividends when applicable) return of 15%. Based on this method the target purchase needs to be below $12, and at the current price is above that. However, the programmed growth rate was only 12.7% for this valuation; when growth rate was increased to 16%, the resulting valuation was above the current price.

The second is based on estimating EPS growth through the sustainable growth rate. The per-share projected book value is estimated by taking the previous year’s book value, adding EPS and subtracting dividends (when applicable). The projected EPS is estimated by multiplying the projected book value by the average Return on Equity, and the projected dividend is estimated by multiplying the projected EPS by the average payout ratio. I then discount the resulting valuation to reflect the price at which the stock will realize a compounded earnings return of 15%. Based on this method the target purchase needs to be below $23, and at the current price there is a 37% MOS.

To ascertain that the price is attractive to me, I take one more thing into consideration. At the current price, would I expect an immediate 15% return on my investment based on earnings and dividends? In this, there is a 4.9% dividend, and the EPS represents about 13% of the share price; so the combined 17.9% qualifies.

Although I have enough concerns about NTRI for my real portfolio, it rates to be a good investment for CAPS purposes.

i like real food. now that i have no money, i look forward to what i eat.