How to Triple GNC's Stock Price Overnight: Restructure and Repurchase

Mad Money research analyst Jack Mohr shares his thoughts on how shares of GNC could triple overnight. He says the secret lies in the company's store ownership structure. Unlike most retailers, GNC has a blended ownership model in which about half of its 6,500 store are franchised, with the other half owned and operated by the company. A dive into its financials reveals an astonishing fact: GNC makes the same amount of money at its franchise stores as it does at its company-owned ones. Simply put, there's no reason for GNC to own its own stores. Instead, it should sell the remaining stores it owns and fetch at least $1.5 billion in cash. Then, with rent eliminated and capex slashed, the leaner, meaner GNC could lever up and raise another $1.5 billion. The company can then take that $2.5 billion in proceeds and buyback 75% of its shares. All together, he sees shares eventually trading north of $150, or ~20x next year's new EPS of $8. While the claims might seem lofty he says the numbers speak for themselves. So GNC - tear down those stores!