“Weight Watchers International, Inc. (WTW) is another stock we recently added. Weight Watchers was founded over 40 years ago. Each week approximately 1.3 million members attend 50,000 meetings around the world. In 2009, over $4 billion was spent on Weight Watchers branded food. As you can see from the chart the stock has recently broken out of a five-year downtrend. In mid-February, the company announced fantastic earnings, powering the shares 46% higher in one day.
“Weight Watchers is recapturing lost market share from prior years. Their turnaround has been helped by their new PointsPlus program, a successful ad campaign featuring Jennifer Hudson and continued growth from their online component. Meeting fees generate approximately 58% of revenues, while product sales generate 42%. Weight Watchers members are spending more money per meeting, $18 now versus $11 in 2003, and membership is increasing. While a moderate pullback can be expected after a surge, we are still positive on the shares.”
Ronald Sadoff, The Major Trends, 3/11
