At this level, this is getting ridiculous. We all know that small cap stocks need catalysts. A major catalyst is just 2 weeks away and the stock still show no sign of life. Here are my reasons:
1. Traffic to the site has more than doubled since last year while NTRI has reduced. This showed their ad is working. http://siteanalytics.compete.com/medifast1.com/ 2. Insiders have been buying the last few weeks 3. Other than DTC, other revenue initiatives are also taking off 4. Profitable quarter after quarter.
% of Shares Held by All Insider and 5% Owners: 16% % of Shares Held by Institutional & Mutual Fund Owners: 14% % of Float Held by Institutional & Mutual Fund Owners: 17% Number of Institutions Holding Shares: 30
MAJOR DIRECT HOLDERS (FORMS 3 & 4)
Holder Shares Reported MACDONALD BRAZDLEY T 839,550 30-Nov-07 MACDONALD SHIRLEY 464,402 4-Dec-06 MACDONALD MARGARET 92,900 6-Jul-06 REILLY DONALD F 58,350 15-Feb-07 MACDONALD MICHAEL C 56,119 15-Feb-07
FROM THE MAVEN
TOP INSTITUTIONAL HOLDERS
Holder Shares % Out Value* Reported WALL STREET ASSOCIATES 536,800 3.92 $2,995,344 30-Sep-07 DIMENSIONAL FUND ADVISORS INC 298,644 2.18 $1,666,433 30-Sep-07 VANGUARD GROUP, INC. (THE) 178,079 1.30 $993,680 30-Sep-07 Barclays Global Investors UK Holdings Ltd 173,020 1.26 $965,451 30-Sep-07 TRELLUS MANAGEMENT COMPANY, LLC 157,800 1.15 $880,524 30-Sep-07 DIKER MANAGEMENT, LLC 132,171 .96 $737,514 30-Sep-07 GSA Capital Partners LLP 58,267 .43 $325,129 30-Sep-07 Bank of New York Mellon Corporation 55,128 .40 $307,614 30-Sep-07 UBS AG 51,090 .37 $285,082 30-Sep-07 ROYCE & ASSOCIATES, INC. 45,200 .33 $252,216 30-Sep-07
TOP MUTUAL FUND HOLDERS
Holder Shares % Out Value* Reported DFA U.S. MICRO CAP PORTFOLIO 123,000 .90 $1,073,790 31-May-07 WADDELL & REED TARGET MICRO CAP GROWTH PORTFOLIO 51,100 .37 $457,345 30-Jun-07 DFA U.S. SMALL CAP SERIES 41,900 .31 $365,787 31-May-07 DFA TAX-MANAGED U.S. SMALL CAP PORTFOLIO 23,805 .17 $207,817 31-May-07 LOTSOFF CAPITAL MANAGEMENT EQUITY TR-MICRO CAP FD 14,600 .11 $73,730 31-Oct-07 ROYCE MICRO CAP TRUST 10,000 .07 $89,500 30-Jun-07 VANGUARD INSTITUTIONAL INDEX-INST TOTAL STOCK MARKET IND 9,986 .07 $89,374 30-Jun-07 SPARTAN EXTENDED MARKET INDEX FUND 7,496 .05 $41,827 30-Sep-07 ISHARES Russell Micro Cap (TM) Index Fund 6,586 .05 $36,749 30-Sep-07 VANGUARD BALANCED INDEX FUND 6,400 .05 $57,280 30-Jun-07
View Transactions for Insiders & Institutional Holders
* Value shown is computed using the security's price on the report date given.
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1. The small cap/micro cap market has been/is in the tank. 2. Tax loss selling may just be completing. 3. Diet sector still out of favor. 4. Define highly profitable. Look at the company's past 5 year growth rate. 4% rounded up. There are companie's growing much faster with much more cash on the balance sheet relative to the stock's valuation which have also been beaten up. 5. Tech stocks may be in favor for company's which save money with their products. 6. Consumer products which are not considered staples may stay out of favor as some are predicting a recession. 7. MED has subtantially missed the analysts' estimates at least the last 4 quarters and I believe in some cases these were reduced estimates. Who's to say when the trend will change.
I'm not saying the stock will stay down for long as every dog has its day but make no mistake about it this stock and company have been a dog for the last 12 months, just look at the chart and the results compared to what they and analysts have projected.
Good luck. Having said all of the above, I would not bet against the company down here but what do I know.
Also, I'm trying to be as objective as possible and sometimes when you are objective you start questioning is this really the best place to put my money. I can't answer that positively with MED. The part of me that isn't often enough prudent is saying you can wait to see the trend changes and then invest your money more safely at a higher stock price. The other part of me says this is pretty low and if management has any clue with what they are doing and we are not going into a recession this is an area where this stock can be bought. The problem is even if you believe management has it right, are we going into a recession?
When and if I take a position I'll post it. The main reason I hadn't bought below $4 to this point was my money is tied up elsewhere and I am avoiding margin as that is hazardous to my health.