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SMALL CAP: NutriSystem
Ticker: NTRI
52 week range: $10-23
Market cap: $456 million
P/E Ratio: 9
Return on Assets: 29%
Free cash flow (millions): $65

Weight-loss company NutriSystem's once-hot stock has stumbled as consumers pulled back on spending, but the company has been cutting costs and launching new programs, including a plan designed for diabetics. Another promising sign is that sales from returning clients now make up 25% of revenues, a boost for earnings because reactivations are more profitable than new accounts.

Investing in NutriSystem is a bit of a waiting game, but analysts see strong promise. "The stock is on a launching pad, not ready to take off. But I'm not worried about it going down," says Mitch Pinheiro, an analyst with Janney Montgomery Scott. "And if the consumer does loosen the purse strings, this stock could perform very well." And with no debt and $74 million in cash, NutriSystem is paying shareholders to wait with a 4.7% dividend yield.

--E.L.

NEXT: SMALL CAP: Sykes

Last updated June 11 2009: 10:27 AM ET
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Criteria include market capitalizations between $200 milion and $1 bilion, at least 8% return on assets, positive free cash flow, and share price no higher than $35. All data related to stock price as of June 1, 2009. P/E ratios based on the previous 12 months' reported earnings. Free cash flow based on latest fiscal year.
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