November 30th, 2005

SpeculatingStocks.com Stock Pick: eDiets.com, Inc. (DIET)

Price: $4.32 (short-term strong buy)

eDiets.com, Inc. is an online provider of services, information and products related to nutrition, fitness and motivation. The company's main revenue comes from premium subscriptions.

The company reported revenue of $13.49 million for the quarter ended in September. Net income came in at $2.08 million, up from $1.25 million for the quarter ended in June. Revenue isn't growing as fast as possible due to the high cost of online advertising; however, eDiets.com has been spending its advertising dollar more efficiently in turn creating higher profits.

This stock should become a play in anticipation of major dieting after the upcoming Christmas holiday season. If profit continues, which we think it will, this company deserves to be trading at a much higher multiple. The President and Chief Operating Officer has now become CEO after the retirement of CEO David Humble, founder of eDiets.com in 1996, who will remain on as Chairman.

DIET is undervalued compared to other stocks and in particular other dot coms. Shareholders have not been rewarded for the company's significant growth. Its only a matter of time before the market realizes the opportunity inherent in DIET.

SpeculatingStocks.com Target Price: We expect DIET to reach $5.50 within the next 1-2 months.