NTRI Stock: NutriSystem Looking Good Right Here

Advertisement

NutriSystem Inc. (NTRI) may not be the most innovative company in the world, and certainly has its share of competition in the age of CrossFit and other more trendy weight loss schemes.

NTRI Stock: NutriSystem Looking Good Right HereIt also may not be your favorite investment if you’re familiar with NTRI stock performance over the last few years; NutriSystem stock melted down even as the bull market was hitting its stride, and has only recently fought back to where it was way back in 2010.

But in this market when valuations are stretched and tech darlings can trade for 10 times sales or 100 times earnings, NTRI stock may be just what you need for a healthy portfolio in 2015.

After slimming down and weathering some tough years, Nutrisystem has moved from turnaround back into growth mode — and investors may want to consider staking out a spot before shares go even higher.

NTRI Is Back in Shape

A few years back, NutriSystem had much bigger problems than its appeal to weight-conscious consumers amid a crowded marketplace. Sure, Herbalife (HLF) and Medifast (MED) were the new kids on the block and getting all the attention, but the real issue back in 2011 was a possible violation of securities law that resulted in a lot of skepticism — and a quick 30% dive in NTRI stock early that year.

Coupled with flat revenue and the fear that diets were the kind of discretionary expense that is first to go in tough economic times, NTRI stock proceeded to drop about 60% from the end of 2010 through early 2013.

But the company turned around. Losses turned into small profits thanks to changes in management and a push into retail that included getting NutriSystem-branded products on display for sale in places such as Walmart (WMT).

It’s added up to a great performance for NTRI stock, including gains of 18% in 2015 thanks to strong earnings in the first quarter. Longer-term, the stock is up an impressive 160% from its 2013 lows.

The stock is a bit rich, trading for a forward price-to-sales ratio of about 1.6 and forward price-to-earnings ratio of around 23. But with 16% earnings growth projected this year and a strong history of EPS surprises, NutriSystem stock could be the beneficiary of low expectations and a successful turnaround could continue to juice results.

It’s not sexy to go with an old-school weight loss company amid the current fitness crazes. However, there’s something to be said for a battle-tested stock that has gotten its act together instead of chasing the latest fad.

Have confidence in NTRI stock here.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/06/ntri-stock-nutrisystem-looking-good-right-here/.

©2024 InvestorPlace Media, LLC