Zacks Investment Research | Apr 29, 2018 10:07PM ET
Welcome to Episode #90 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service , shares some of her top value investing tips and stock picks.
Recently, Tracey covered Weight Watchers International ( (NYSE:WTW) ) for a Zacks Top Stock Pick of the Week and looking at the chart, she was reminded how risky it was for Oprah Winfrey to buy a large stake in the company.
Oprah’s Gamble
On Oct 19, 2015, Oprah Winfrey released a statement saying she had bought 10%, or about 6.4 million shares, of Weight Watchers and was joining the board. She had the option of buying another 5% and would also become the company’s spokesman.
Up until the announcement, the shares had fallen 73% year-to-date. She bought at the average price of $6.79.
The company was struggling with subscriber growth and had a lot of debt.
While shares spiked on news of the big stock buy, it wasn’t all rainbows and roses. Most people forget that by the end of December 2016, 14 months after she bought in, shares had fallen 27.3%.
3 Lessons from Oprah’s Weight Watchers Investment
Applying the Oprah Lessons to Value Stocks Today
Tracey took a look at three well-known beaten down stocks to see if the lessons from Weight Watchers could apply to them.
Oprah took a risk with Weight Watchers and it paid off. While it now looks like a no-brainer, there was no guarantee. Weight Watchers didn’t turn around overnight.
What else should investors know about investing in hidden gems?
Find out on this week’s podcast.
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