The main point of this post is to provide the Notes PDF from which The Avid Hog issue on Weight Watchers was prepared:
A lot of people emailed me about Weight Watchers (WTW) after the company reported earnings and the stock dropped about 25% last week. Some of the people asking about Weight Watchers were subscribers to The Avid Hog. Others were not. For the first few issues of The Avid Hog (including the issue in which we picked Weight Watchers) we did not put out a “Notes” PDF with the issue.
Since a lot of people said they were “rethinking the thesis” or “considering selling” or “thinking about doubling down” on Weight Watchers at today’s price, I thought we should post some items with information that might be useful.
Those items are:
Weight Watchers is down 49% from where Quan bought it, 44% from where I bought it, and 35% from where we picked it for The Avid Hog. Quan and I still own the stock. We have no plans to sell it. We’ll let you know if that changes.
The notes have been updated to reflect the most recent (much lower) stock price and to discuss the 3 topics most often asked about in emails: 1) Debt 2) Free Apps 3) Artal.
If you want to know our thoughts on the company, please read the “Notes” above. They capture our thinking better than I could in a blog post. For information about Weight Watchers’s debt please read the “Debt” page of the notes. You should also read the actual 8-K explaining the credit agreement. For management’s thoughts on the company and the “turnaround plan” please read the Investor Day Presentation and either listen to the last 2 earnings calls or read the transcripts. You can find them on the company’s website, at earningscast.com, at Seeking Alpha, etc.
Like I said, if Quan or I change our positions in Weight Watchers in any way – we will update you the moment we do so.
For a negative view of Weight Watchers see Punch Card Investing’s posts:
Once again, here are the complete notes we used to prepare the Weight Watchers issue of The Avid Hog. They have been updated to include information not available at the time the issue was published (a lower stock price and info from The Investor Day).
Try Before You Buy: To sample the current issue of Geoff and Quan’s newsletter, The Avid Hog, just email Subscriber Services and ask for a copy.