3 Fitness Stocks To Whip Your Portfolio Into Shape in 2020 – The Motley Fool
Posted: December 8, 2019 at 4:46 pm
The United States has high obesity rates, which are in part caused by access to fast food, eating highly processed meals, and sedentary lifestyles. However, some trendsetting companies are combating obesity by providing Americans with quality home fitness equipment, mobile work out classes, cheap gym memberships, and dieting plans.
Adding these three consumer discretionary stocks to your portfolio today could result in healthy returns and stronger finances in 2020.
Peloton (NASDAQ:PTON) shares are up more than 30% since its IPO in September 2019. It's currently trading around $32 and it has upside potential since more people want to have a convenient home workout. It has two main sources of revenue, including selling exercise bikes and treadmills starting at $2,245 each along with its monthly memberships.
Image Source: Getty Images
The monthly memberships start at $19.49 and enable users to stream live classes ranging from yoga to cycling via the attached Peloton monitors on bikes and treadmills or through iOs, Web, and Android platforms. Peloton mainly ships goods to the U.S., but is starting to add other countries like Canada, U.K., and Germany. Users can access the online classes from anywhere with Wifi. It has 1.4 million community members and over 500,000 paying monthly subscribers.
The monthly membership provides consistent, recurring income, despite the company not being profitable yet. While this company has great upside potential, it still has a negative free cash flow of $248.09 million. Peloton also has minimal debt compared to its assets, which are $0.48 billion and $2.48 billion, respectively. The minimal debt load and manageable debt to equity ratio of 0.30 prove this firm can manage funds successfully.
The holiday season and the new year are times when many consumers gift Peloton equipment to loved ones or buy them for themselves. This company's quarterly revenue increased to $228 million from $112 million a year ago. It's also projecting next year's revenue to be around $1.5 billion and that the subscriber count will increase to 895,000, up from 560,000 at the end of Q1 2019.
Peloton also lost $942 million in market cap on Dec. 4 due to a controversial commercial. Many users considered the ad to be sexist, confusing, and this demonstrates how volatile stocks that have recently IPO'd can be. Investors should consider the fallout from its tone-deaf ad along with Peloton's lack of profitability, before buying the stock. But it's razor and blade model and solid debt management make the company look geared up for a positive new year.
Going to the gym can be a hassle and expensive, with an Equinox membership costing over $200 per month! Planet Fitness (NYSE:PLNT) is a nationwide gym chain that offers high-quality equipment, personalized training, massages, and workout classes starting at just $10 per month. Its premium membership known as PF black, costs $22 per month and provides access to any location, tanning beds, and other perks.
Planet Fitness has over 1,800 locations spread throughout the U.S., Mexico, Canada, Puerto Rico, Australia, the Dominican Republic, and Panama. It currently has over 14 million members worldwide and the customer churn rate is 25% during the first five months. Luckily, this rate drops to around 2% once a membership has been active for at least a year. The membership growth rate is impressive considering there were 12.5 million members in April 2019.
This company's stock price has increased by a factor of four since its 2015 IPO. Its current price is approximately $75 and the three-year net annualized income growth of 68.14% is much higher than the industry average.
Planet Fitness is profitable and has a net profit margin of 17%. Despite these facts, this stock might be overvalued as it has a high P/E ratio of 55 and the trading price is near its 52-week-high of $81.90. Even though it has a high valuation, its earnings are increasing each year as the diluted EPS climbed from 0.50 in 2016 to 1.32 in 2019.
On Nov. 20, Planet Fitness announced it will approve a share buyback up to $500 million. This buyback program will reward shareholders through a higher percentage of ownership and increased earnings per share.
Diet is an extremely important factor for a healthy lifestyle as it's difficult to lose weight while eating highly processed foods. Many people try to count calories on their own, which is easier said than done. WW International (NASDAQ:WW) solves these problems by providing custom weight loss plans, point systems to keep users on track, more than 4,000 healthy recipes, and personalized coaching. Memberships are affordable, ranging from $3.07 to $12.69 per week.
WW has over 4.6 million members throughout the world and its customers are sticking with the process longer. For instance, more than 21% of members are signing up for the six-month plan, compared to 14% in August of 2017. More members are willing to try the program for longer terms, but this isn't a guarantee against subscriber decline. For instance, subscriber growth starts strong in the first quarter and gradually declines as users lose sight of their New Year's resolutions. The subscriber growth started at 4.6 million for Q1 2018 and fell to 3.9 million by year-end. Despite this, subscriber count usually fluctuates around 4.6 million.
It's trading around $41 and had a 2001 IPO opening price of $29.75. WW has a strong three-year net income annualized growth rate of 89.38% and a net profit margin of 9.5%. Despite these positive metrics, it had a rough start earlier this year due to branding issues along with competition from other diet apps like Noom and the keto diet.
Some branding issues include launching an app for kids called Kurbo, which has been controversial. Many critics spoke out against the app saying it promotes eating disorders, low self-esteem, and other mental health issues among youth. WW has had branding problems because it switched from focusing on dieting to overall wellness, losing the household name recognition when it made these drastic moves too quickly.
The keto diet has a wide reach as its global revenue is expected to hit $12.35 billion by 2024. Many companies like Perfect Keto, Sports Research, and Nestle are contributing to this large revenue figure. Noom is another start-up that offers a similar calorie point, color-coded system. Like WW, it also offers coaching and custom training programs, which could be a competitive threat to WW's growth.
Luckily, it differentiates itself by having partnerships with meditation app Headspace and meal-kit providerBlue Apron. These partnerships will help diversify revenue and prevent it from being commoditized like other weight loss apps.
Obesity is a problem in the U.S., but more Americans are taking the proper steps like exercising and eating healthier. These innovative companies help them achieve this goal and pump up portfolio returns.
Out of these options, Planet Fitness would be the best choice due to buy today to its quality, affordable gym memberships, diminished member turnover, solid profit margins, and impressive expansion over the last few years. You can exceed both your financial and fitness New Year's resolutions by investing in these fitness companies.
Read the rest here:
3 Fitness Stocks To Whip Your Portfolio Into Shape in 2020 - The Motley Fool
- LIVESTRONG.COM - Lose Weight & Get Fit with Diet ... [Last Updated On: September 14th, 2015] [Originally Added On: September 14th, 2015]
- Diet (nutrition) - Wikipedia, the free encyclopedia [Last Updated On: September 14th, 2015] [Originally Added On: September 14th, 2015]
- Diet and Weight Loss [Last Updated On: September 14th, 2015] [Originally Added On: September 14th, 2015]
- Dr. Oz - Diet and Exercise Plans for Your Body Type [Last Updated On: September 23rd, 2015] [Originally Added On: September 23rd, 2015]
- Diet and Exercise Tips | American Academy of ... [Last Updated On: September 23rd, 2015] [Originally Added On: September 23rd, 2015]
- Diet and Exercise Wellness Center - Walmart.com [Last Updated On: September 26th, 2015] [Originally Added On: September 26th, 2015]
- Questions About My Diet And Exercise - YouTube [Last Updated On: October 23rd, 2015] [Originally Added On: October 23rd, 2015]
- Diet, Exercise, and Sleep - National Sleep Foundation [Last Updated On: January 22nd, 2016] [Originally Added On: January 22nd, 2016]
- Diet. Exercise. Calcium : Menopause Matters [Last Updated On: March 17th, 2016] [Originally Added On: March 17th, 2016]
- Diet & Exercise | CarolWrightGifts.com [Last Updated On: April 6th, 2016] [Originally Added On: April 6th, 2016]
- Menopause Diet, Nutritional Facts [Last Updated On: April 27th, 2016] [Originally Added On: April 27th, 2016]
- Exercise Videos - Expert Diet Plan Reviews [Last Updated On: May 1st, 2016] [Originally Added On: May 1st, 2016]
- Diet and Fitness Tips & Articles | Health Info | Walgreens [Last Updated On: July 21st, 2016] [Originally Added On: July 21st, 2016]
- Tai Chi for people with dementia - European Pharmaceutical Review [Last Updated On: July 12th, 2017] [Originally Added On: July 12th, 2017]
- The secret to weight loss is 80% diet, 20% exercise is this true? - Star2.com [Last Updated On: July 30th, 2017] [Originally Added On: July 30th, 2017]
- This expert says you need to let go of your 'all or nothing approach' - Body and Soul [Last Updated On: July 30th, 2017] [Originally Added On: July 30th, 2017]
- Choose a better diet and exercise regimen for health - Sarasota Herald-Tribune [Last Updated On: July 30th, 2017] [Originally Added On: July 30th, 2017]
- Doc: Choose better diet, exercise regimen for health - The Detroit News [Last Updated On: July 30th, 2017] [Originally Added On: July 30th, 2017]
- Universal Fitness: Putting the social in working out - Arizona Daily Sun [Last Updated On: August 6th, 2017] [Originally Added On: August 6th, 2017]
- Exercise, diet change and more: The best ways to get rid of backache - Express.co.uk [Last Updated On: August 6th, 2017] [Originally Added On: August 6th, 2017]
- Diet (nutrition) - Wikipedia [Last Updated On: August 6th, 2017] [Originally Added On: August 6th, 2017]
- Miranda Kerr's personal trainer reveals the one diet that made his models gain weight - The Independent [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Stay active to BEAT dementia: Exercise and diet will stave off condition in later life - Express.co.uk [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Another View: Choosing the right diet to combat diabetes - Auburn Journal [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Does exercise really cause weight loss? This MD doesn't believe so - Metro US [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Tom Brady reveals exactly when he decided to change his diet and exercise habits - CBSSports.com [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Weight loss: Woman lost over five stone in a year and THIS is how she did it - Express.co.uk [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- How to Balance Diet and Exercise: 8 Steps (with Pictures) [Last Updated On: August 10th, 2017] [Originally Added On: August 10th, 2017]
- Exercising is good, but calories are what count for losing weight - The Denver Post [Last Updated On: August 20th, 2017] [Originally Added On: August 20th, 2017]
- Quality of life increases with diet & exercise - The Coastal Journal [Last Updated On: August 20th, 2017] [Originally Added On: August 20th, 2017]
- The Secret Behind Demi Lovato's Confidence and Happiness? This Routine - POPSUGAR [Last Updated On: August 20th, 2017] [Originally Added On: August 20th, 2017]
- Diet Pills That Work Fast Without Exercise - Lose Weight ... [Last Updated On: August 20th, 2017] [Originally Added On: August 20th, 2017]
- Kristina Dropped 102 Pounds by "Doing Zero Exercise" in the First Year - POPSUGAR [Last Updated On: August 22nd, 2017] [Originally Added On: August 22nd, 2017]
- 25-year-old supermodel Kate Upton says weightlifting completely changed her body and outlook on fitness - INSIDER [Last Updated On: August 22nd, 2017] [Originally Added On: August 22nd, 2017]
- Intensive lifestyle change: It works, and it's more than diet and exercise - Harvard Health (blog) [Last Updated On: August 22nd, 2017] [Originally Added On: August 22nd, 2017]
- 83% of people lose weight on THIS diet without exercising - Daily Star [Last Updated On: August 25th, 2017] [Originally Added On: August 25th, 2017]
- Bob Harper Shares All the Ways His Life Has Changed Following His Heart Attack - POPSUGAR [Last Updated On: August 25th, 2017] [Originally Added On: August 25th, 2017]
- Report: Diet, Exercise Help Diabetics Maintain Normal Lifestyle - CBS Philly [Last Updated On: August 25th, 2017] [Originally Added On: August 25th, 2017]
- Tia Mowry on her 5-second style and why she'll never give up comfort foods - Yahoo Food [Last Updated On: August 25th, 2017] [Originally Added On: August 25th, 2017]
- Weight loss: Man loses over three stone by swapping fizzy drinks for THIS - Express.co.uk [Last Updated On: September 1st, 2017] [Originally Added On: September 1st, 2017]
- Emilia Clarke's trainer reveals what she does to stay in such great shape - INSIDER [Last Updated On: September 1st, 2017] [Originally Added On: September 1st, 2017]
- Nathalie Emmanuel's diet and exercise regime helps her on-set stamina - Belfast Telegraph [Last Updated On: September 3rd, 2017] [Originally Added On: September 3rd, 2017]
- When diets fail, Rujuta Diwekar's exercise guide comes to the rescue - Economic Times [Last Updated On: September 3rd, 2017] [Originally Added On: September 3rd, 2017]
- Diet and Exercise | County Health Rankings & Roadmaps [Last Updated On: September 28th, 2017] [Originally Added On: September 28th, 2017]
- Benefit to improving diet and exercise at the same time ... [Last Updated On: September 30th, 2017] [Originally Added On: September 30th, 2017]
- Exercise and Anti Inflammation Diet to Live Longer [Last Updated On: December 31st, 2017] [Originally Added On: December 31st, 2017]
- Diet and exercise | Department of Food Science and Human ... [Last Updated On: January 5th, 2018] [Originally Added On: January 5th, 2018]
- The relationship between diet and exercise Steven Low [Last Updated On: May 7th, 2018] [Originally Added On: May 7th, 2018]
- CRON-diet - Wikipedia [Last Updated On: September 26th, 2018] [Originally Added On: September 26th, 2018]
- Diet and Exercise for Heart Disease Prevention [Last Updated On: September 26th, 2018] [Originally Added On: September 26th, 2018]
- Simple and Affordable Self-Care Strategies for a Healthier Way of Life [Last Updated On: July 18th, 2019] [Originally Added On: June 4th, 2019]
- Ketogenic Diet 101: Working Out While on a Keto Diet [Last Updated On: July 20th, 2019] [Originally Added On: July 20th, 2019]
- How To Create The Perfect Diet Plan For Your Workout Goal [Last Updated On: July 20th, 2019] [Originally Added On: July 20th, 2019]
- Pre-Workout Diet: What You Should Eat Before An Intense ... [Last Updated On: September 9th, 2019] [Originally Added On: September 9th, 2019]
- We did Gwyneth Paltrow's diet and exercise routine for a ... [Last Updated On: September 9th, 2019] [Originally Added On: September 9th, 2019]
- Low energy level - It may be due to deficiencies - TheHealthSite [Last Updated On: September 20th, 2019] [Originally Added On: September 20th, 2019]
- Heart attack: Taking this supplement could stave off the life-threatening condition - Express [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Keto weight loss: Man drops 15 stone in a year with a change in diet - what did he do? - Express [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Marathon Runner Diet: Your Guide to the Best Marathon Food - Better Homes and Gardens [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- How Swimming and HIIT Training Helped This Guy Lose 115 Pounds and Get Fit - menshealth.com [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- The dos and donts of weight loss from diet pills to calculators and keto - The Sun [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- The Type of Latest Fitness Products That Can Help You Stay Fit and Active - Thrive Global [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- How to lose weight like this guy who lost 25 kgs on a pure vegetarian Indian diet plan - GQ India - What a man's got to do [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- How to have barley (Jau) water for weight loss - Times of India [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- How to get rid of visceral fat: Best diet plan to reduce the harmful belly fat - Express [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Sania Mirza Workout and Diet: How the Indian Tennis Star Lost 26kg in Four Months After Her Pregnancy - LatestLY [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- 5 ways to get rid of common back pain - prima.co.uk [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- High blood pressure affects young, healthy medical students - The Southern Maryland Chronicle [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Walk to End Alzheimer's Comes to Westchester on Sunday - The Examiner News [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Weight Loss: 4 ways to get a flat stomach without stepping foot in the gym - PINKVILLA [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Weight loss: Use this cooking oil to burn belly fat and lose fast - what is it? - Express [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Five ways to maintain healthy bowels - The Guardian [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Weight Loss: Woman drops 3st in a couple of months by following diet plan - what is it? - Express [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Hypertension: Can Yogurt Help You Control High Blood Pressure? The Best Time Have It And How Much - NDTV News [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- Heart disease and weight: A cardiologist shares 6 diet and exercise tips to maintain a healthy weight - Times Now [Last Updated On: September 27th, 2019] [Originally Added On: September 27th, 2019]
- From binger to grazer, six different sleep diets and how you can improve your kip - The Sun [Last Updated On: October 9th, 2019] [Originally Added On: October 9th, 2019]
- Here is Omoni Obolis secret to staying fit and healthy in spite of a busy schedule - Pulse Nigeria [Last Updated On: October 9th, 2019] [Originally Added On: October 9th, 2019]
- Mandira Bedis Dussehra workout is all the fitness inspiration you need today - The Indian Express [Last Updated On: October 9th, 2019] [Originally Added On: October 9th, 2019]
- Heart disease: Best exercise to lower the risk of developing the deadly condition - Express [Last Updated On: October 9th, 2019] [Originally Added On: October 9th, 2019]
- 9 Causes of Unintentional Weight Gain - Healthline [Last Updated On: October 9th, 2019] [Originally Added On: October 9th, 2019]