Greg Taxin, the manager of Clinton Group, is bullish on NutriSystem Inc. (NASDAQ:NTRI) and according to a recently amended filing with the Securities and Exchange Commission, Mr. Taxin has increased his fund’s stake in the company to 1.73 million shares from 1.70, which account for approximately 6.0% of the total amount of shares outstanding. Clinton Group has also disclosed a letter sent to the management of NutriSystem, in which the investor clarifies and further elaborates on his earlier proposal for the company to maintain the current dividend and to buy back some of its stock.
According to the letter, Mr. Taxin advises NutriSystem to maintain their current yearly dividend of $0.7 per share and, should cash flow allow it, to increase it. Taxin also suggests that the company borrows $80 million to repurchase 4.4 million shares, a move which would decrease the total number of shares outstanding to 24.3 million. He also argues that such actions will bear no negative impact on the financial situation of the firm and would only increase its value over time.
The full letter can be found here:
Clinton Group Letter to NutriSystem
Israel Englander is also bullish on NutriSystem Inc. (NASDAQ:NTRI), having increased his fund’s stake by 1210% during the previous quarter. Millennium Management currently holds approximately 313,500 shares valued at $5.15 million. Jim Simons, the manager of Renaissance Technologies, is also keeping an eye on this stock, having increased his fund’s holding by only 1% during the 2013 fourth quarter. Still, Renaissance holds a significant stake: over 2 million shares reportedly worth $32.9 million.
NutriSystem Inc. (NASDAQ:NTRI), a provider of weight loss programs to clients in the United States, has a market cap of $448 million and its annual dividend of $0.7 yields approximately 4.5%. The stock is traded at a trailing Price to Earnings (P/E) ratio of 62.xx, which is inline with the industry average. The forward P/E ratio of 21.44 is a sign that market participants expect the company to improve its earnings potential. NutriSystem reported $69.8 million in revenues and earnings per share of $0.04 for the three months ending December 31, 2013. Analysts expect it to perform even better in the current quarter and predict revenues of $121 million. Earnings are expected to be negative, though – a loss of $0.02 per share is predicted.
Disclosure: none.
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