Weight Watchers And Outerwall: Value Stocks Or Traps?

Weight Watchers And Outerwall: Value Stocks Or Traps?

Weight Watchers And Outerwall: Value Stocks Or Traps? by Ben Strebel, Strubel Investment Management

Dear Investors,

We are currently looking at two companies to add to the portfolio: Weight Watchers International, Inc. (NYSE:WTW) and Outerwall Inc (NASDAQ:OUTR). Both of the companies bear similarities to two of our previous successful investments, H & R Block Inc (NYSE:HRB) and GameStop Corp. (NYSE:GME).

We are still in the midst of researching both of them, but we will summarize our analysis so far. If you have any opinions on the two companies we’d love to hear them.

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Outerwall Inc (OUTR)

Outerwall Inc (NASDAQ:OUTR) is the bizarrely named parent company of Coinstar and Redbox.

If you’ve read my earlier articles on GameStop Corp. (NYSE:GME), then you may remember my continuous rants about how, despite appearing similar, Blockbuster and GameStop had radically different business models. (Blockbuster had to turn over massive amounts of merchandise at cheap prices, while GameStop turned over less merchandise at much higher prices.) This time everyone is at least correct when they accuse Redbox of being the next Blockbuster. Both have the same business model. The difference between the two this time is cost.

For an