NutriSystem, Inc. (NTRI)

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.