Gorging on NutriSystem
It’s time to follow up on those New Year’s resolutions. Every year my local gym is packed during the first 3 to 5 weeks of operation. I call it the “resolution wave”. By the time February and March roll around, the gym is back to normal operating levels, half the crowd disappearing. How can you blame them though? There’s this great Chicago restaurant chain, called Portillos, just five minutes from my gym that serves up some nice Italian Beef, Chicago style hot dogs, BBQ Ribs, etc. This isn’t something I can easily give up. However there is something I can gorge on without adding the pounds, and that’s NutriSystem’s stock (NTRI). A week ago they turned up on the screen I discussed in my last post. I decided to dig further and see if they had some promise for my ten grand portfolio.
What is NutriSystem?
First off, I am not a dietitian or an expert in healthy eating. NutriSystem provides a meal based program geared towards busy individuals who don’t have the time to actively select healthy meals, or don’t feel like thinking about what they should and shouldn’t eat. Based on a monthly subscription fee of $293.72 for women or $319.95 for men (at the time of this writing) you get 28 days of meals automatically delivered to you. This includes breakfast, lunch, snack, dinner, and dessert. That comes out to about $11.42 per day for a full day of food. The company wants you to follow up with exercise, and water consumption in order to achieve those weight loss goals, in addition to providing you counselors to help with the program.
Why NutriSystem stock?
What really caught my eye when I dug into their financials was the massive revenue and profit growth they have experienced in the past 2 to 3 years. Their profit margins have grown from a low 2.68% in 2004 to 14.98% in 2006. For the first 3 quarters of 2007, they are running at 14.63%.
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