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Medifast, Inc.

November 17, 2008 | Comments: 0
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Highlighted stocks include Medifast, Inc. (MED - Snapshot Report), SEACOR Holdings Inc. (CKH - Snapshot Report), Deckers Outdoor Corporation (DECK - Analyst Report), Warner Chilcott Limited (WCRX - Snapshot Report), and Solera Holdings, Inc. (SLH - Snapshot Report).



Medifast, Inc. (MED - Snapshot Report), the provider of health and weight loss products, reported strong third-quarter earnings on Nov 6 as the company didn't see any slowdown in demand for weight loss products.

Earnings per share were 11 cents compared to 7 cents in the third quarter of 2007. EPS met analysts' estimates.

Revenues jumped 25% to $27.3 million from $21.8 million in the year ago period. The Take Shape For Life segment, which is the health coaches business, grew revenues by 99% year-over-year. Take Shape for Life represented 50% of third-quarter revenues.

The number of health coaches jumped 94% to 3,200 compared to 1,650 from a year ago. Growth in Take Shape For Life accelerated in September and October primarily due to individuals looking to supplement their income during this difficult economic environment.

The Medifast Weight Control Centers segment also saw an increase in revenue of 77% over 2007 mainly due to increased brand awareness from targeted advertising spending.

Given the global financial crisis, the company reassured investors on its financial condition. As of Sep 30, Medifast's balance sheet contained stockholders' equity of $37 million and working capital of $12.1 million. The current ratio was 2.5 to 1.

2008 Full-Year Guidance Reaffirmed

Given the strong third quarter, Medifast reaffirmed prior 2008 full-year guidance with revenue growth in the range of 8-10% and EPS growth in the range of 30-35%.

Value Fundamentals Still Strong

Medifast continues to be a Zacks #1 Rank (Strong Buy) stock. It's now trading at 9.6x forward earnings. The company has a 1-year return on equity (ROE) of 15.01%.

Read the Oct 16 analysis.

Update to Previous Value Zacks Rank Buy Stocks

SEACOR Holdings Inc. (CKH - Snapshot Report), the marine transportation and services company, is making profit off of its diverse range of shipping services. The company has surprised on estimates 2 out of the last 4 quarters on average of 5.91%. CKH is cheap. It's trading at only 7.8x forward earnings. Read the Nov 10 analysis.

Deckers Outdoor Corporation (DECK - Analyst Report), the high performance footwear company, is that rare value stock that is also aggressively growing. It has surprised on estimates 4 consecutive quarters by an average of 26.12%. DECK is also cheap. It's trading at only 8.5x forward earnings. Read the Nov 11 analysis.

Warner Chilcott Limited (WCRX - Snapshot Report), the pharmaceutical company, beat Wall Street estimates in the third-quarter by 18.18% as its strategy of focusing on specialist doctors paid off. The company has surprised on estimates 4 consecutive quarters by an average of 13.64%. WCRX is trading at only 8.6x forward earnings. Read the Nov 12 analysis.

Solera Holdings Inc. (SLH - Snapshot Report), which provides software to process auto insurance claims, saw revenues rise 15% in the first quarter of 2009 as business remained strong. The company has surprised on estimates 4 consecutive quarters by an average of 14.19%. Solera is trading at 12.3x forward earnings. Read the Nov 13 analysis.


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