Weight Watchers International, Inc. (WTW) Shares Plunge on Allegations of Bug Found in Food


It’s been one heck of a rollercoaster ride for shareholders of Weight Watchers International, Inc. (NYSE:WTW) over the last three months. After shares soared back in October when it was announced that Oprah WInfrey would be taking a stake in the company, the price slowly dipped back down a bit through mid to late December. Then the stock saw another spike following the appearance of Winfrey in Weight Watchers International’s (NYSE:WTW) television commercials. Today, however, shares are down significantly after opening green this morning.

The stock has continued a steady slide throughout the day after allegations have surfaced that a woman named Jessica Mills from Queens, New York found a cicada bug in her Smart Ones Weight Watchers packaged meal earlier this week.

“All of a sudden you hear crunch. I reached into my mouth and pulled something out,” she said.

The food, which had originally been produced by Kraft Heinz Company, is now being investigated to see if this incident is confined to one package or perhaps many. The market seems to be reacting quite strongly to these allegations, even though there has only been one such report so far. The stock has fallen 19.80% or $3.9 following this negative news, hitting $15.8 per share. About 7.46 million shares traded hands or 122.69% up from the average. WTW has risen 256.24% since June 4, 2015 and is uptrending. It has outperformed the S&P500 by 260.93%.

From a total of 4 analysts covering Weight Watchers International (NYSE:WTW) stock, 1 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 25% of the ratings are positive. The highest target price is $35 while the lowest target price is $6. The mean of all analyst targets is $15.07 which is -4.62% below today’s ($15.8) stock price. Weight Watchers International was the topic of 10 analyst reports since August 8, 2015 according to the firm StockzIntelligence Inc. Craig Hallum maintained shares on December 7 with a “Buy” rating. Morgan Stanley upgraded WTW stock in a recent report from August 19 to a “Equal Weight” rating. Finally, Zacks upgraded the stock to a “Hold” rating in a report they issued on an August 8.

The institutional sentiment increased to 1.19 in Q2 2015. It’s up 0.45, from 0.74 in 2015Q2. The ratio is positive, as 26 funds sold all their Weight Watchers International, Inc. shares they owned while 26 reduced their positions. 23 funds bought stakes while 39 increased their total positions. Institutions now own 53.36 million shares which is 0.69% more than the previous share count of 53.00 million in 2015Q2.

Ah Equity Partners Iii L.L.C. holds 30.43% of its total portfolio in Weight Watchers International, Inc., equating to 2,186 shares. Artal Group S.A. owns 29.44 million shares representing 4.2% of their total US portfolio. Moreover, Pomelo Capital Llc has 2.13% of their total portfolio invested in the company, equating to 806,100 shares. The Louisiana-based Diversified Investment Strategies Llc has a total of 0.68% of their portfolio invested in the stock. Permit Capital Llc, a Pennsylvania-based fund reported 104,400 shares owned.

Weight Watchers International, Inc. is a well-known provider of weight management services. The company has a market cap of $1.20 billion. The firm operates globally through a network of Company-owned and franchise operations. It has 18.6 P/E ratio. The Firm provides Services and Products including: Weight Management Plans, Clinical Efficacy, and Meetings.