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Nutrisystem, Inc. Message Board

  • wwwhead222 wwwhead222 Apr 12, 2008 12:15 AM Flag

    3.3M shares due to S&P 600

    According to my calculations, NTRI's addition to the S&P 600 will result in over 3.3 million shares purchased, based on today's closing price. This assumes that Nutrisystem gets a .13% weighting in the S&P 600, assuming a S&P 600 Adjusted Market Cap of $480B.

    To arrive at that weighting, I took the average weighting and average market cap of four companies already in the index. Next, I calculated the "Weighted Dollars Invested" and divided that result by the current PPS. That gives an estimate of the number of shares that would need to be purchased at the current PPS to achieve the "Weighted Dollar" amount.

    Now, let's consider a few more of our most recent statistics. NTRI has a float of roughly 30M shares, of which insiders own 20%, or roughly 6M shares. Short interest is somewhere around 20M shares, depending on how many covered during this week's pop. It is a pretty good assumption that insiders will not sell at these depressed levels, leaving an approximate market float of 24M shares.

    Does that mean we have 20M shorts that know NTRI will rise due to its addition to an index that will result in 3.3M shares being purchased on the open market? I think it does...and my guess is that many of those shorts will look to close out their positions soon. That will increase the demand for NTRI shares even more - hopefully making those that bought/buy and HOLD NTRI shares very happy.

    These assertions are based on the math below, which I welcome others to comment on - copy and paste into an Excel spreadsheet and it will probably format better.

    Source http://www2.standardandpoors.com/spf/pdf/index/SP_SmallCap_600_Factsheet.pdf

    S&P 600 Adjusted Market Cap ($480 Billion)
    Symbol Company Weight Market Cap ($M) Weighted Dollars Invested($M) PPS # Shares
    COG Cabot Oil & Gas 1.04% $4,971 $499 $57.61 8,663,718
    FLIR FLIR Systems 0.86% $4,130 $413 $29.08 14,192,957
    SGR Shaw Group 0.80% $3,852 $384 $52.73 7,281,168
    MEE Massey Energy Company 0.61% $2,938 $293 $46.20 6,336,606
    Averages 0.83% $3,973 $397

    NTRI Nutrisystem 0.13% $612 $61 $18.21 3,359,639

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    • your assumpions are huge, we'll see.

      • 1 Reply to akaoutwest
      • He is probably not far off. In fact, I would expect the volume on Wednesday and Thursday to average about 200% of the 3 month average (or 4 million per day). I looked at the past 6 companies added to the index (occurred in March and April) and the volumes for all companies increased @ 200% during the two days after the date they were added to the index. (Volumes were also higher than average on the days between the announcement date and the date the companies were officially part of the index.)

        Note that mutual funds will not buy NTRI until Tuesday since NTRI is not officially added to the index until Tuesday night. So, Monday will probably show lower volume than Tuesday. Also, looking at other companies recently added to the index, the mutual funds appear to have bought nearly all of their share requirements in one day--so, again, Tuesday volume may be much higher than an already likely high Monday trading volume.

    • <<<I'd much rather have exactly that...a huge percentage of people who have shorted at a much higher price...>>>

      what you wrote is just ridiculous nonsense.

      i'm a libertarian at heart. therefore, if you prefer to have a hot rod up your sphincter that is your business... if on the other hand you want to convince others to subject themselves to your perverted logic then things change.

      you CAN"T hope for a short squezze and argue at the same time that you prefer the average short price to be higher.
      a short squeeze is created by fear of loss the same concept that creates market crashes. but most of all, it is caused by the NECESSITY to cover! that necessity is only caused if the share price moves further away (higher) form your entry point. as long as shorts are in the money there is no necessity therefore no panic therefore no short squeeze.

      enjoy the rod

    • 3.30 million shares (per your estimate)

      0.55 million shares bought at 11:06am April 14th
      0.19 million shares bought at 12:23pm April 15th
      0.14 million shares bought at 01:48pm April 15th
      0.10 million shares bought at 03:51pm April 15th
      0.79 million shares bought at 03:59pm April 15th
      -----------

      1.53 million shares left to purchase by index funds on Wednesday??

      Average daily trading volume (3 month lookback excluding Feb 20th and April 8th volume spikes of 10m+ shares) prior to Monday April 14th was 2.0 million/day.

      Average trading volume on Monday and Tuesday is 3.2 million/day when excluding the above listed 5 large purchases potentially bought by index funds. Comparing the 2.0m.day avg volume to the 3.2m/day avg volume on Monday and Tuesday, perhaps the index funds bought 40+ smaller 20k to 50k share blocks over the past few days and are fully invested by today's close??

 
NTRI
16.15+0.08(+0.50%)Aug 27 4:00 PMEDT

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