Visitors Now:
Total Visits:
Total Stories:
Profile image
By Gannon on Investing (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Punchcard Investing’s Take on Weight Watchers (WTW)

Tuesday, November 29, 2016 0:05
% of readers think this story is Fact. Add your two cents.

(Before It's News)

I have 25% of my portfolio in Weight Watchers (WTW). My average cost is $37.68 a share.

A blog I read regularly, Punchcard Investing, took a closer look at Weight Watchers. The card remained firmly unpunched: 

At a 6% FCF/EV yield (on 2012 FCF), WTW is not particularly cheap.  Further, this seems to be a stock market investment rather than a business investment.  Mr. Gannon’s analysis turns on Weight Watchers P/E multiple increasing from 8 to 15.  We don’t like to rely on a speculative change in investor sentiment.  Instead, we like to rely on improving business results to carry the day.  As the name of the blog would suggest, we are not comfortable buying a stock that we would not want to own forever.  Otherwise, the risk of a “value trap” is simply too high.  Here, WTW simply has no durable competitive advantages.  In the turbulent weight management sector, this makes forecasting future cash flows impossible and far too risky of an investment.

(Punchcard Investing

Talk to Geoff about Weight Watchers (WTW)

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.