Why Shares of Weight Watchers International Inc. Soared on Wednesday

By Timothy GreenFool.com

What: Shares of weight loss company Weight Watchers soared on Wednesday following the company's presentation at the Global Consumer & Retail Conference on Tuesday evening. At 2:20 PM Wednesday, the stock was up about 14%.

So what: Shares of Weight Watchers have surged since the announcement in October that Oprah Winfrey was partnering with the company, a deal which included Winfrey buying a 10% stake in the company. The stock has now nearly quadrupled since the deal was announced, and investors seem to be extremely optimistic about Weight Watchers' prospects with Winfrey on board.

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While Weight Watchers has been suffering from a declining membership, the company cited stabilizing recruitment trends during its third-quarter earnings conference call. At the time, Weight Watchers stated that it expected that global recruitments would be positive during the fourth quarter, driven by the response to the Winfrey partnership, and the company reaffirmed this guidance during its presentation on Tuesday. This optimism from the company appears to be driving the stock higher.

Now what: Even before Weight Watchers launches a revamped version of its program, which is expected to occur in December, the deal with Winfrey is already having a meaningful positive impact on the business. Whether these positive recruitment trends persist remains to be seen, but investors are clearly buying into the story.

The article Why Shares of Weight Watchers International Inc. Soared on Wednesday originally appeared on Fool.com.

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