Without doubt, one of the defining trends shaping the coming decade in asset markets is an increased focus on healthy lifestyles. People are simply more health conscious. This isn’t because of some strange fad. It’s probably simply a function of an increasingly widespread understanding of how to be healthy – what makes the body work better, and how to integrate simple steps into your lifestyle so that you feel better, live longer, and have more “peak” time while you’re around.
It’s an evolutionary progressive virtuous circle of knowledge, distribution of knowledge, and active assimilation of that knowledge. If weren’t the case that people were increasingly focused on valuing healthy choices based on improving awareness of how to manifest that value… that would be the strange outcome. As it is, the most obvious path is what we are seeing.
And this has implications for investors.
With that in mind, here are a few interesting names in the space that deserve some attention: WW International Inc (NASDAQ:WW), Planet Fitness Inc (NYSE:PLNT), Gentech Holdings Inc (OTCMKTS:GTEH), and Medifast Inc (NYSE:MED).
WW International Inc (NASDAQ:WW) provides weight management services worldwide. The company operates in four segments: North America, Continental Europe, United Kingdom, and Other.
It provides a range of products and services comprising nutritional, activity, behavioral, and lifestyle tools and approaches. The company offers various digital subscription products to wellness and weight management business, which provide interactive and personalized resources that allow users to follow its weight management program via its Web-based and mobile app products, including personal coaching products; and allows members to support each other by sharing their experiences with other people on weight management and wellness journeys.
WW International Inc (NASDAQ:WW) recently announced that WW Health Solutions has been added as a new wellness and weight management solution to CVS Health’s Point Solutions Management offering. WW Health Solutions aims to propel happier, healthier, more productive workplaces and make wellness more accessible. Joining the Point Solutions Management platform will enable employers and plan sponsors that use CVS Caremark for pharmacy benefits management to access WW Health Solutions with simplified contracting, preferred pricing, and streamlined eligibility and billing processes.
The new offering makes it easier for plan sponsors to add WW Health Solutions to their benefit packages – providing their members and families with tools that will positively impact health and culture, and promote sustainable behavior change. Through the collaboration, plan sponsors can offer their members WW digital offerings, which are accessible virtually anywhere, to meet members where they are, helping them along their weight loss and wellness journeys.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action WW shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Shares of the stock have powered higher over the past month, rallying roughly 7% in that time on strong overall action.
WW International Inc (NASDAQ:WW) generated sales of $400.4M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 20.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($292.3M against $560.3M, respectively).
Planet Fitness Inc (NYSE:PLNT) franchises and operates fitness centers under the Planet Fitness name. It operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The Franchise segment is involved in franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico, and Australia.
The Corporate-Owned Stores segment operates corporate-owned stores in the United States and Canada. The Equipment segment engages in the sale of fitness equipment to franchisee-owned stores in the United States.
Planet Fitness Inc (NYSE:PLNT) recently announced that members and guests will be required to wear a mask at all times while inside all open stores, beginning August 1. Currently, all Planet Fitness employees are required to wear masks. To date, the Company has approximately 1,450 locations open across 46 states, the District of Columbia, Canada, and Australia.
“As we continue to face the COVID-19 pandemic, amid an ongoing global health crisis, wellness has never been as essential to our collective community as it is today,” said Chris Rondeau, Chief Executive Officer at Planet Fitness. “Gyms are part of the solution and a key element of the healthcare delivery system, providing much needed access for people to exercise and stay healthy. Given our leadership position within the industry, we believe it’s our responsibility to further protect our members, employees, and communities so that we can all safely focus on our health, which is more important now than ever before.”
PLNT has had a rough past week of trading action, with shares sinking something like -3% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -9%.
Planet Fitness Inc (NYSE:PLNT) managed to rope in revenues totaling $127.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -14.5%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($610.7M against $180.2M).
Gentech Holdings Inc (OTCMKTS:GTEH) is certainly the most speculative name on this list. But it may also be the most interesting. The company is on track to commercialize in a manner that it hasn’t seen in the past thanks to its recent acquisition of Sinfit, a top-5 functional foods brand that pulled in millions in revenues in 2019 – for a detailed discussion of this move and its rapid expansion since, take a gander at the company’s recent “MoneyTV” interview, which can be found here.
And it is making quick strides toward significant success in this venture, recently announcing that it has officially qualified for “Mass Market Retail”, FDM and Military status at Europa Sports, one of the largest supplement distributors in the world. Europa Sports has been a leader in the nutrition and performance space for 30 years. This distributor brings a large US network to the table, with more than 14,000 active wholesale customers receiving products from six (6) major distribution centers, aggregating over a quarter million square feet of total warehouse space, producing a two-day fulfillment rate of 96% on new orders.
“Mass Market Retail status with Europa opens up an enormous new marketplace for SINFIT products,” commented David Lovatt, CEO of GenTech. “We have access to mass retailers and general goods outlets across the country – ie, Costco, BJ’s, Sam’s Club, and many more. As well as with Military Status achievement now, we will be able to sell directly into the Military based stores. This directly opens the door for us to gain access to millions and millions of new browsing end-market customers through Europa.”
That announcement was followed by the company’s move to sign a contract with Fusion Consulting Group (www.fusioncgpr.com), a leading functional food and sports nutrition distributor based in Puerto Rico.
Founded in 2008, Fusion has become Puerto Rico’s Top Functional Food and Sports Nutrition Distributor, servicing over 1200 locations in Puerto Rico, including Walmart, Sam’s, Costco, CVS, and Walgreens. Fusion also has a distribution footprint that includes the Caribbean Islands and Central America, and is in the process of expanding into parts of South America. Fusion serves supermarkets, mass merchandisers, C-Stores, gyms, health food stores, and pharmacies, as well as other distributors internationally.
When Gentech Holdings Inc (OTCMKTS:GTEH) acquired all of the assets, including inventory, revenues, goodwill, intellectual property, trade secrets, and trading relationships of Sinfit, it broke into the functional food business with a brand currently sold in GNC stores, distributed by Europa Sports, and available in more than 10 countries worldwide that produced over $2.2 million in revenues in 2019.
“This acquisition has a tremendous synergistic element that enhances our current business model right now, with substantial revenues and a brand that vertically integrates perfectly in the GenTech growth model,” commented Lovatt. “Since the outbreak of Covid-19, their business has done a great job of maintaining market positioning and brand momentum. Most of the business has been converted to an online model, which is driving a huge jump in Amazon and Direct to Consumer sales of their products. And we are now actively engaging our sales team in acquiring orders from physical store locations again.”
Gentech Holdings Inc (OTCMKTS:GTEH) could be set to finally put out some massive topline numbers. And the market doesn’t seem like it has given the stock enough attention given this shift in recent weeks. Keep this one on the radar.
Medifast Inc (NYSE:MED) manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific.
It offers bars, bites, pretzels, puffs, oatmeal and cereal crunch products, drinks, hearty choices, pancakes, puddings, soft serves, shakes, smoothies, soft bakes, and soups under the Medifast, OPTAVIA, Thrive by Medifast, Optimal Health by Take Shape for Life, and Flavors of Home brands.
Medifast Inc (NYSE:MED) recently announced that it has appointed James (Jim) Maloney as Chief Financial Officer, effective July 20, 2020. In his role, Mr. Maloney will be responsible for leading the finance function including all aspects of financial planning and analysis, setting Medifast’s financial and capital allocation strategies, and managing investor relations. He will serve as a member of the company’s leadership team and report directly to Chief Executive Officer Dan Chard.
“We are pleased to welcome Jim to the Medifast team as we continue on our mission to offer the world lifelong transformation, one healthy habit at a time,” said Chard. “Jim brings deep public company experience, a strong focus on capital allocation and an ability to manage the finance function of a fast-growing, dynamic and complex business. He has been responsible for managing large operations for global companies to support business objectives and growth. He also has a history of building value, which will be important as we aim to deliver long-term sustainable growth through our differentiated approach to health and wellness.”
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. Shares of the stock have powered higher over the past month, rallying roughly 8% in that time on strong overall action.
Medifast Inc (NYSE:MED) generated sales of $178.5M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 4.6% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($105.3M against $81.8M).
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