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Weight Watchers International, Inc. Message Board

  • llarissa111 llarissa111 Dec 3, 2012 10:23 AM Flag

    WHY is this Dropping? Can someone enlighten me?

    #$%$ why is this stock dropping each day. I dont understand why. I am tempted to buy some call options as it might be a sell and buy scenario to push the options ....

    Sentiment: Hold

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    • I've noticed the weakness too. Maybe we are seeing a mini bear raid on this stock. Realistically, if we are unlucky, this selling jag could take us down to the mid 40s.

      I notice also that S&P has a 'sell' on this stock.

      I would say even under the best of circumstances, this stock tends to be volatile, and it certainly has been volatile since losing its strength last spring.

      If you look back at historic data, the company's growth has actually been pretty good, with $1.47 billion in revenues in '07, versus $1.81 billion predicted for this year, for a growth rate of between 4 and 5% over that span. But since the price to sales ratio is 1.6, it could be said the market has discounted this decent growth already.

      The company certainly has plenty of room to increase the dividend to be more shareholder friendly, though the debt load is something to keep an eye on.

      I'm not sure what to say about last spring's buyback. The company paid a high price for those shares. I hope they continue a buyback now that that the shares have fallen and are heavy, but we will have to see...

      Sentiment: Hold

 
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