The “Oprah Effect” Smacks One Stock and Boosts Another

I am not much of a TV watcher, but I am also not completely out of the loop about what’s on the small screen.

Like everyone else, I am well acquainted with Oprah Winfrey and her empire of talk shows, magazines, satellite radio, book clubs, movies, a production studio, and who knows what else.

She’s so influential that she has an effect named after her: the Oprah Effect. All we need is her first name.

The Oprah Effect typically refers to her power to catapult sales into the stratosphere of a book, a business, or anything else she endorses.

We recently saw the Oprah Effect in the stock market. One stock took a beating. Another shot higher.

One Announcement Is All It Takes

The Queen of Daytime TV is best known for her incredible interviewing skills, book club, and Favorite Things giveaways. She once gave everyone in her audience a new car.

Maybe I’ll start my own Favorite Things giveaway with stocks…

You get a share, and you get a share, and you get a share!

Winfrey has been a spokesperson and served on the board of directors for the weight-loss company since 2015. So everyone was surprised when she announced her departure last week after revealing that her recent dramatic weight loss was due to taking new weight-loss drugs.

She also revealed that her shares in WW International (WW) – valued at more than $18 million – will be donated to the National Museum of African American History and Culture.

That’s when we saw the reverse Oprah Effect, as Weight Watchers shares went into a tailspin. WW, which once topped $40 a share in 2021, plummeted 17% just one day after the announcement to $3.18… and has continued its downward spiral ever since.

Winfrey didn’t specify which weight-loss drug she’s taking, but chances are it’s one of the two biggest drugs on the market that everyone seems to be talking about: Ozempic or Wegovy.

And both are produced by the same company: Novo Nordisk.

With the growing popularity in these weight-loss drugs, there’s plenty of discussion about which is better for your health – traditional weight-loss methods like working out and eating healthy or simply taking a pill.

I work hard to exercise and eat right, and it mostly pays off for me. . But I know a lot of people struggle with weight issues, and obesity is considered a global health crisis.

I can’t give you any advice there, but I can help you figure out which stocks are better for your wallet. Let’s look at how both WW International (WW) and Novo Nordisk (NVO) rate in my Quantum Edge system.

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WW International (WW)

Oprah’s announcement dragged shares down, yes, but it rates incredibly low in my system with a Quantum Score of 20.7. As a reminder, a score of 70 to 85 is the optimal buy zone, so we’re not even in the same zip code.

Its fundamentals and technicals are also low. WW International’s sales declined 14.5% last fiscal year and 13.6% the last three years. That negative trend drags the Fundamental Score down to an abysmal 16.7. And the Technical Score, which reflects price action and volume among other factors, is not much higher at 23.5.

It’s great that Oprah is donating her shares, but for everyone else, I’d put your money elsewhere.

Novo Nordisk (NVO)

Institutions are also gobbling up this stock right now. My system captured five Big Money buy signals in the last 30 days and 12 in the last 90 days.

By the way, today’s action pushed Novo Nordisk past Tesla (TSLA) in market valuation. TSLA has had a rough time of it, down 27% just in 2024. Its Quantum Score has fallen sharply to 46.6 and is now out of my buy zone.

NVO is going the other direction. With the increased demand and spotlight on Novo Nordisk’s two biggest drugs, Ozempic and Wegovy, shares have surged more than 30% since the beginning of this year.

Around 90% of NVO’s overall sales – totaling $31.2 billion – come from its obesity and diabetes care division. Those sales grew 154% last year. Risk increases when a business is highly dependent on one area, but it also makes sense given the strong growth and public awareness of the company’s two weight-loss drugs.

It’s clear the more traditional weight-loss method loses when it comes to making its shareholders profits. And if Oprah ever brings back her Favorite Things giveaway anytime soon, let’s hope she’s giving out shares of NVO and not WW International.

Talk soon,

Jason Bodner
Editor, Jason Bodner’s Power Trends

P.S. My latest recommendation in Quantum Edge Pro is also a biopharmaceutical company, but it’s developing treatments for patients suffering from under-addressed disorders. It, too, has seen positive results from clinical trials.

Like NVO, its Quantum Score, fundamentals, and technicals all rank in my optimal buy zone. But it has appeared on my system’s Top 20 report five times in the last three months, compared to one for NVO. These are the highest quality fundamental stocks seeing unusually large buying.

This stock is still below my buy-up-to price. Click here to learn how you can get in on this exciting new recommendation today.