Nutrisystem Inc Update
Sep 20th, 2007 by Shaun Carter
Citigroup recently changed its price target for Nutrisystem Inc (NTRI) from $90/share to $81. They cite lower than expected sales because of the new diet drug Alli, which I touched on in a previous post about Alli vs. Nutrisystem. This n.ews prompted a quick selloff and a 10% drop in price. However, I think the news is overblown and ironically timed to coincide with the option expirations this Friday and successfully pushed the price below 50/share (a highly traded option strike price both on the call and put side).
This is a perfect opportunity to jump in and pick up shares under 50 while the price is being manipulated to the downside. After option expiration Friday the price should begin moving up back into the 50’s pending earnings, which should be good as I think the success of the Dan Marino ad campaign is being understated by the Citigroup analysts.
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