Unconventional Capital Wisdom
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Measuring Weight Watchers' Wide Moat

Executive Summary:

  • Over a decade, Weight Watchers (NYSE:WTW) has grown market share from 18% to 43% of the US weight loss service industry. This time period has included the largest recession in history.
  • Over a decade, Weight Watchers' ROIC and CFROI have exceeded cost of capital. The large sustained ROIC returns suggest that Weight Watchers has a high probability of sustaining higher returns compared to their peers.
  • Weight Watchers' franchise purchases have been accretive to the tune of 3-4x carrying value.
  • Weight Watchers has and continues to own the lion's share of industry profits.
  • Weight Watchers has a differentiated service, enjoys scale advantages and owns a significant trust worthy brand.

In a previous Alpha-Rich article, I described

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