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$17.54 0.74 (4.40%)
2/9/2010 4:03 PM

Medifast, Inc. (MED)

CAPS Rating:
**

The Company is engaged in the production, distribution, and sale of weight management and disease management products and other consumable health and diet products.

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What the Community Thinks

Total Members

208 Outperforms
47 Underperforms
 

All-Stars

43 Outperforms
23 Underperforms
 

Wall Street

3 Outperforms
0 Underperforms
 

Members bullish on MED are also bullish on:

Members bearish on MED are also bearish on:

Ticker Tags

Personal Products (35), Growth (1902), Consumer Staples (230), Multi-level Marketing (7), Defensive (1457), Micro Cap (4701)
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Medifast, Inc. At A Glance

Current Price: $17.54
Last Trade Time: 2/9/2010 4:03 PM
Open: $0.00
Previous Close: $16.80
Daily Range: $16.85 - $17.90
52-Week Range: $3.81 - $36.58
Volume: 1,108,377
Market Cap: $269.83M
P/E Ratio: 23.01
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Stock Trends

MED VS S&P 500 (SPY)

News & Discussion Boards

Top Bull Pitch

Recs

1

Medifast, Inc. (MED)

Avatar RagingFoo (41.49) Submitted: 6/21/07 8:48 AM

This company knows what they're doing. In comparison to the other diet sites, this one has affiliates out the wazoo selling its products all over the world. Their numbers (in regards to affiliate sales) is one of the highest in the market, meaning that sales are super strong, and the product(s) are ...More

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Top Bear Pitch

Recs

1

Medifast, Inc. (MED)

Avatar expert6 (< 20) Submitted: 12/08/09 11:12 PM

This is one of best shorts ever. Med is up about 9 times over its recent low. PE of 47 ( to the moon already ) Predominantly only substantial insider selling this year. Cash and real assets not much over $1 per share. Expense rate has almost kept up with growth rate which the 2010 rate project...More

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CAPS Members

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Recs

0

 (MED)

Avatar pagefm83 (22.04) Submitted: 1/15/10 2:21 PM : Outperform Start Price: $22.54 MED Score: -16.73

nothing will come of these allegations and the stock will climb back to where it left off, and then continue to grow like it always has...no evidence in sight that this will not be the case, great earnings and profit, lots of cash

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Recs

0

 (MED)

Avatar RickFoolAccount (26.38) Submitted: 1/11/10 7:29 PM : Outperform Start Price: $26.41 MED Score: -27.66

As of today's date 1/11/10 I'm sure this is a safe bet. However it could outperform the S&P longer than Four Years too

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Recs

0

 (MED)

Avatar CaptBS (97.81) Submitted: 1/11/10 3:08 PM : Underperform Start Price: $14.25 MED Score: -12.84

This one is a hard call. On one hand, it's hard to argue with results: Medifast has reported consistent and staggering revenue growth over the last 9-10 months, in spite of a crippling recession and precipitous drop in discretionary consumer spending. Over this period, the stock has gained a whopping 800+% without any significant pullback. Is this incredible run indicative of runaway success that will continue for some time to come, or is it a warning sign of a bubble that's about to burst?

As you may have guessed from the red thumb, I'm a little suspicious of this company's valuation (currently: 46+ P/E and 10 P/B). Although the last few quarterly reports have indeed been impressive (TTM EPS growth of 121% stands out), I see a few red flags with respect to this stock and the way the company does business. Most simply, from a technical perspective, the stock is long overdue for a significant price correction, as there has been virtually no selling pressure on an average volume of about 500K - 1M shares over the past year.

More importantly, the sustainability of the company's business model strikes me as questionable, as Medifast has derived an increasingly large part of its revenue from its "Take Shape for Life" coaching program. Although this program is one of the company's main differentiators, its capability to generate new revenue relies heavily on the ability of its weight-loss coaches to recruit other coaches and clients (for a commission). Some have gone as far as calling this a pyramid scheme (take your favorite salt-shaker to www.medifraud.net), but whether or not you agree with that assessment, the key takeaway is that the revenue from this line of business will eventually plateau, if not enter into a downward spiral.

Finally, the scandal involving the CEO aggressively pumping Medifast's stock on the Yahoo Finance message boards and the overly defensive, vitriolic press releases that the company tends to issue in response to any perceived attack on its public image make me wonder about Medifast's corporate culture... I just can't imagine Weight Watchers or Jenny Craig engaging in this type of behavior.

In the end, Wall Street primarily cares about numbers, and so far, Medifast has certainly delivered on that front. Although the company's torrid growth may continue for another quarter or two, sooner or later (and I would guess sooner) the stock will run into some significant resistance from both a technical and revenue-growth standpoint. When that happens, expect the share price to trim a significant amount of fat.

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Recs

0

 (MED)

Avatar MIGNON51 (< 20) Submitted: 1/11/10 12:09 PM : Outperform Start Price: $27.67 MED Score: -30.22

THE INDUSTRY HAS SUSTAINED GROWTH

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Recs

1

 (MED)

Avatar expert6 (< 20) Submitted: 12/08/09 11:12 PM : Underperform Start Price: $31.01 MED Score: 41.28

This is one of best shorts ever. Med is up about 9 times over its recent low. PE of 47 ( to the moon already ) Predominantly only substantial insider selling this year. Cash and real assets not much over $1 per share. Expense rate has almost kept up with growth rate which the 2010 rate projected by the euphoric analysts is less that a third of the 2009 rate. MED boasts of 20 thousand doctors involved Ha Ha You know the credibility is shot when they admit only one percent of sales base is doctors. The diet hype won't carry this stock into the next universe but it is set for a parachuteless dive when there is a race to get out of the back door when the buyers soon wake up and realize they bought into a real firetrap. If you get my reasoning figure out that it is best to sell at it's high right here . I think fair value may be in low teens at best. Remember what Cramer says about what happens to pigs - they get slaughtered.

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Wall Street

Results 1 - 3 of 3  

picks per page. CHANGE

Top
Pick		Member NameMember RatingStart
Date		CallTime FrameStart
Price		Stock
Gain		S&P
Gain		ScorePitch
TrackJimCramer < 20 10/07/09 Outperform 3W $21.71-19.21%+1.34%-20.55
TrackBBTCapMkts 75.09 01/19/07 Outperform NS $9.21+90.45%-20.16%+110.61
TrackRyanBeck 66.05 09/25/06 Outperform NS $8.85+98.19%-13.61%+111.80

Results 1 - 3 of 3  

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