Weight Watchers International (NYSE: WTW)
Weight Watchers International (WTW), a weight management services company announced yesterday that they have entered a partnership with Oprah Winfrey. Oprah Winfrey has taken a 10% stake in the company with an option to acquire an additional 5%. Oprah has agreed to join the board of directors and will have a say in future products and programs.
Weight Watchers International CEO Comments
“We are expanding our purpose from focusing on weight loss alone to more broadly helping people lead a healthier, happier life,” said Jim Chambers, President and CEO, Weight Watchers International, Inc. “Through our conversations, it became clear that there is tremendous alignment between Oprah’s intention and our mission. We believe that her remarkable ability to connect and inspire people to realize their full potential is uniquely complementary to our powerful community, extraordinary coaches and proven approach.” PR Newswire
Comments made by Oprah Winfrey:
“Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for,” said Oprah Winfrey. “I believe in the program so much I decided to invest in the company and partner in its evolution.” PR Newswire
WTW Technical Analysis
WTW gapped up in price yesterday to $11.98, up from the prior day’s close of $6.79, which is a 76% increase in price based on favorable news. Taking a look at the daily chart, we can see the last time the stock traded above this price level was on February 26th, when it closed at $17.56. On that occasion, the stock tanked and hit lows of $10.90 on the next day of trading, equivalent to a 38% drop in price. As we can see, the stock is capable of making big moves in short periods of time. The stock has been trading in a range between $4 and $7 dating all the way back to the middle of May. The stock does have a relatively low float of 27.52 million shares and a high short float of 74.24%. The stock traded on over 22 times the normal daily trading volume. All of these factors make the stock a good candidate for the gap and go strategy. The stock did reach pre market highs of $13.55 and then gave back $1.57 at the open, or equivalent to 12%. For trading purposes, my entry point would have been $12.00 looking for a run to $13. My stop loss would have been $11.75 fearing anything below that and the stock would start to fill in the gap up.
Weight Watchers International, Inc. provides weight management services worldwide. The company operates through North America, United Kingdom, Continental Europe, and Other segments. It offers a range of products and services comprising nutritional, exercise, and behavioral tools and approaches. The company also provides various products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, PointsPlus calculators, and fitness kits, as well as ActiveLink products. In addition, it offers online subscription weight management products, such as Weight Watchers Online that offers online and mobile content, functionality, resources, and interactive Web-based weight management plans; and Weight Watchers eTools, an Internet weight management product, which allows users to manage the day-to-day aspects of weight management plans online or via their mobile devices. Further, the company provides applications for mobile devices, including the iPhone, iPad, and Android devices; and third-party products, including Fitbit. Weight Watchers International, Inc. was founded in 1961 and is headquartered in New York, New York. Yahoo Finance