INTRODUCTION
In March of this year, I asked a buddy of mine, a Hedge Fund manager at the time, if he could provide me with a stock pitch of one of his current portfolio investments. He obliged and offered me Weight Watchers. The uniqueness of this particular stock pitch was that the main assertions presented in his investment thesis were able to be tested using CivicScience data. You can find the entire investment research here.
BACKGROUND ON WEIGHT WATCHERS
After years of double-digit revenue declines, Weight Watchers (Ticker Symbol: WTW) seemed to have a turnaround strategy to successfully drive strong growth in 2017 and beyond.
INVESTMENT THESIS
Main assertions for outperformance were:
1. New weight loss program that is proven to perform 15% better than the previous
2. Revamped app that syncs with any smart fitness device to monitor progress
3. New online community and coaching that offers moral support via creative content, education, and community to aid in fitness goal achievement
4. “Oprah Effect” to provide continued and positive brand lift
CIVICSCIENCE DATA RESULTS
Our past data results showed that more people would consider using the program, or were currently happy with it, than those who weren’t or wouldn’t consider it.
Further analysis showed that people who were favorable towards Oprah were more likely to be current or potential customers, and people who didn’t like Oprah didn’t seem to be avoiding the program.
PAST RESULTS
Given the positive results from the data, it appeared that the main assertions were validated. Year to date, WTW is up approximately 157%.
NEW RESULTS – AS OF SEPTEMBER
Some time has passed and WTW stock has recently fallen from its 2017 highs, so I wanted to to see whether the previous trends were breaking or faltering.
It seems that potential new and returning customers have remained about the same. Meanwhile, fans of Oprah that are possible new or returning Weight Watchers customers may have increased.
SUMMARY
The results show that overall favorability towards the revamped Weight Watchers program and favorability towards its spokeswoman, Oprah, have remained steady over time. Given the past performance of WTW stock during 2017, this may be a good sign for WTW stockholders moving into 2018.
*This document is for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation.
