5 Small Cap Stocks With Wide Moats

4. Medifast, Inc. (NYSE:MED)

Number of Hedge Fund Holders: 18

Market Capitalization as of December 27: $1.28 billion

Medifast, Inc. (NYSE:MED) is a consumer staples company based in Baltimore, Maryland. It manufactures and distributes weight loss and weight management products.

Linda Weiser at DA Davidson holds a Neutral rating on Medifast, Inc. (NYSE:MED) shares as of November 4.

Medifast, Inc. (NYSE:MED) uses a unique angle to get a competitive edge in the weight management sector. The company has a “buddy system” model of weight loss management, offering its services through designated coaches who develop personal connections with its clients. Between 2017 and 2022, the company has seen massive revenue growth from $300 million in 2017 to the $1.59 billion figure in 2022.

Medifast, Inc. (NYSE:MED) was found among the 13F holdings of 18 hedge funds in the third quarter. Their total stake value was $120 million.

Miller Howard Investments, an investment management firm, mentioned Medifast, Inc. (NYSE:MED) in its third-quarter 2021 investor letter. Here’s what the firm said:

“AFTER A METEORIC RISE OVER THE PAST YEAR, small-cap stocks reversed course with the Russell 2000 Index down -4.4% for the quarter. Much of the downdraft was focused on stocks that had done well in the pandemic environment but lost favor with investors who see a recovery on the horizon. Our largest detractors have all benefitted from pandemic-driven demand. Medifast (MED), a provider of weight loss programs and our second biggest detractor, traded off this quarter over worries that their success has been bolstered by people working from home.”