DIET

[oicpecnoc]

I need it to make it to 6 to erase my attmept to catch this knife.  I was about a buck too soon.   While we are quoting songs, let me just say that "the waiting is the hardest part."

[1reilly]

Luke
My 18 day SMA is right around 6.52. I'm going to try and add to this around 5.20 this morning. I am definitely going to enter today and I'll use 4.92 as a stop. Your point about the fundamentals is well taken. I go back to the original thought process which led us all to believe that FC would have no impack on Q4 and led me to believe that Q1 would still find this company refining its new business plan. I am able to make a case for todays trade we'll see if it leads to $.
mike

[Lucas Scott]

Many were too quick to pull the plug on DIET. It has had a very nice bounce. I am hoping for just a little more upside tomorrow morning. Then I will probably sell and look to buy back lower. Resistance at the 20 ema (6.10 and falling), and the 38.2 Fib retrace @ 6.17. I would sell in a heartbeat if it got there.

C'mon DIET, give us one more good day! As Melf Elf said in what seems to have been his final rant at 3SoF:  "GO IN THAT HOUSE OF PAIN THAT YOU SEEM TO WANT TO BE IN, BUT GET AWAY FROM ME.  I'M TRYING TO WORK, DAMMIT."  Not sure if it's applicable but it cracks me up every time I read that line

[Lucas Scott]

The DIET rally stalled today and I sold my position at 5.70.  I think it's near a short-term top. I'll keep on my watchlist for re-entry in the low 5's.

[Lucas Scott]

DIET is teasing the longs. It is pushing against the top of an ascending triangle. But is it really an ascending triangle or is it a bear flag?  Yesterday it popped out of the triangle and tagged the 38.2 retrace line, then quickly fell back into the triangle and closed bearishly. I guess it couldn't stand being out of that "House of Pain" that Michael and Melf Elf had built. Today it changed its stripes and looks bullish again.

On a different note, here is one of David Randolph's last posts at 3Stocks before he went into a self-imposed exile, posted the day DIET started to tank:

The company beat expectations but guidance wasn't as strong as probably many would expect. Fresh Cuisine is still in its early stages.

I believe the company is underestimating Fresh Cuisine's potential.

I know people are selling off DIET in the pre-market, but I'll continue holding the stock, both on a long term and trading perspective.

It has stuck in my mind ever since because it was so bold. David was basically saying: "The market has got it wrong, the company has got it wrong. I am right."  Yowza!!  

Anyway, I'll buy a breakout of the triangle if it happens tomorrow, but I'll have a short leash on it if it doesn't go my way.

[Amarens]

Sure would like to see DIET get out of that triangle on the upside! Still holding, but with a big loss. Should have made a clearer plan for myself but did not 

Amarens

[jorgegr]

Anybody still holding??

News:

Press Release Source: eDiets.com, Inc.


eDiets.com(R) to Report First Quarter 2006 Results on Monday, May 15, 2006
Monday May 8, 11:36 am ET


DEERFIELD BEACH, Fla., May 8 /PRNewswire-FirstCall/ -- eDiets.com, Inc. (Nasdaq: DIET - News), leveraging the Internet and technology to bring diet, fitness and healthy lifestyle solutions to market, today announced that it expects to report results for its first quarter ended March 31, 2006, before the U.S. equity markets open on Monday, May 15, 2006.

jorgegr

[jorgegr]

Next Monday earnings report


Press Release Source: eDiets.com, Inc.


eDiets.com(R) to Report First Quarter 2006 Results on Monday, May 15, 2006
Monday May 8, 11:36 am ET


DEERFIELD BEACH, Fla., May 8 /PRNewswire-FirstCall/ -- eDiets.com, Inc. (Nasdaq: DIET - News), leveraging the Internet and technology to bring diet, fitness and healthy lifestyle solutions to market, today announced that it expects to report results for its first quarter ended March 31, 2006, before the U.S. equity markets open on Monday, May 15, 2006.

jorgegr

[jorgegr]

Earnigs report on next monday 

Press Release Source: eDiets.com, Inc.


eDiets.com(R) to Report First Quarter 2006 Results on Monday, May 15, 2006
Monday May 8, 11:36 am ET


DEERFIELD BEACH, Fla., May 8 /PRNewswire-FirstCall/ -- eDiets.com, Inc. (Nasdaq: DIET - News), leveraging the Internet and technology to bring diet, fitness and healthy lifestyle solutions to market, today announced that it expects to report results for its first quarter ended March 31, 2006, before the U.S. equity markets open on Monday, May 15, 2006.

[1reilly]

I'm still in with my original position but got taken out of my trading position on a spike low at 4.89 off a 4.92 stop. I can't begin to tell you how that upset me. I vowed to not think about this position until I saw this upcoming report. So I won't comment except to say they better show some real numbers in this quarter with FC . I bought this company based on the food service growth potential and I believe only that will move this stock significantly higher. I will be surprised if this quarter shows growth but at least I've stayed the course through the 1st quarter and that was my plan. "Oh ye of little faith" could describe my feeling about this corporate business plan. Hope I'm wrong and I get an upside surprise. Good luck to all who still own this.

[Lucas Scott]

Now that's the DIET we've all come to know and love Go into that house of pain, I'm trying to work dammit!

[Lucas Scott]

Talk about betting on the wrong horse. Back on January 9 after David picked DIET, comparisons to NTRI logically followed. David even posted a chart of NTRI with the question: "Can DIET do this?" We got our answer on that. But what if David had picked MED instead? At this point it would almost be a 3-bagger. What a chart! MED is executing on their meal plan service and it is reaping huge returns for investors.

Anyone notice DIET changed their meal plan name from "Fresh Cuisine" to "eDiets Express"? What prompted that name change? "Fresh" we thought was a key selling point for the DIET program -- fresh fruits and veggies, which NTRI didn't offer. Guess DIET didn't agree. "eDiets Express" - could they be anymore blase? 

[422fwhp]

Is it lower from here or does $4.80-ish look like support?

Everybody out?

[422fwhp]

ouch

[David Randolph]

1. Introduction

Besides being one of my largest percentage losses (-25%), DIET taught me an important lesson: you can never be certain about future prospects of a company. At the time, when it was trading around $7 or $8, everybody thought the Fresh Cuisine programme would increase revenues and profits, and DIET would follow the footsteps of NTRI. Instead, revenues fell and EPS turned negative. The stock plunged 65%.

So I'm curious about the current valuation and prospects. Is this the right time and price to invest in DIET shares?

2. Profile

eDiets.com, Inc. (DIET) engages in the development and marketing of Internet-based diet and fitness programs primarily in North America and western Europe. It offers online diet, fitness, and recipe services. (full profile here)

3. Technical Analysis
3.1. All History Chart



Up and down, up and down, but DIET is at about the same price it was back on its IPO in 2000.

3.2. Medium Term Chart



There's that gigantic gap down, after a quarterly earnings release that was a disappointment. DIET has been on a descending trend ever since. But, just recently, there were some signs of life, also due to an earnings report.

3.3. Short Term Chart



The short term chart shows the possibility of an inverted head and shoulders pattern. DIET must close above $3.68 to confirm this bullish reversal pattern. Let's make some fundamental tests now.

4. Fundamental Analysis
4.1. Number of Shares Outstanding



The company has been increasing the number of shares issued and outstanding. I don't like that, as it increases the market cap without the corresponding rise on the share price. Current market cap is 24.3 million*$3.41 = $82.86 M.

4.2. Liquidity



DIET has a weak balance sheet.

4.3. Revenues



Revenues are expected to decline by about 4% this year in comparison to 2005. This happened for the first 9 months of the year. The revenue multiple is $82.86 / $50.89 = 1.63.  The average revenue multiple for the "Internet Information Providers" industry is 3.79. For NTRI, which has a similar business model, it is 4.37. So DIET seems very cheap at this point, exclusively considering the revenue multiple.

4.4. Profits



This is a very irregular EPS picture, with more losing years than profitable ones. It looks like the company is still looking to find its business model. Let's break this to a quarter by quarter basis:



The company said on Thursday that it returned to profitability, with a $0.02 EPS. Expectations for the next two quarters are for a loss of ($0.01) and ($0.09), respectively. I guess there's room for a positive surprise here.

5. General Overview

Here are some recent news excerpts:

- «We also embarked on the integration of our Nutrio.com and eDiets.com technology platforms into a single asset that we believe will support lifetime relationships with our business and consumer customers. Nutrio.com is exhibiting rapid growth and has signed, or is in the process of signing, five new contracts as well as continuing to expand its business with existing clients."»

I remember that a 3 Stocks subscriber's wife said she didn't like the name ediets.com, because she didn't like to think she was on a diet. She preferred the name NutriSystem. Perhaps many women felt like that, and ediets.com bought www.nutrio.com and is integrating the two websites. 5 new contracts looks good, since Nutrio had just 8 when it was acquired. Anyway, nobody knows the value of these contracts.

I just love the idea of food delivery to an online community concerned about health and nutrition. I think it makes perfect sense. I can't figure out why NTRI is doing so well, with $560 M in 2006 sales and $2.28 B in market cap, and DIET can't do it.

The two companies were so close just a couple of years ago, but now NTRI is 27 times bigger than DIET. Perhaps the new President of DIET can help turn things around, because there's no doubt the market is there for the company, a huge market.

I don't like the increase in the number of shares outstanding, I don't like the balance sheet, I enjoy the revenue numbers and I dislike the EPS trends (or lack of). But I love the sector and the business. Shouldn't I just buy the leader, NTRI, and leave DIET alone?

Perhaps I should, but the opportunity for upside seems so much larger on DIET, with just $82 M in market cap and an enormous market potential.

I want to invest, but I need more confidence. Management needs to show they can pull DIET out of this whole and make it shine. I'll continue studying the company, if you want to receive updates on this analysis or studies on other stocks, please register.