Is Investing in Fitness Good for Your Health? - 7investing 7investing
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Is Investing in Fitness Good for Your Health?

7investing lead advisor Dana Abramovitz draws comparisons between investing and the health & wellness industry.

February 17, 2023

The Super Bowl is over. The ads for chocolate, flowers, and jewelry dominated the airwaves as we celebrated Valentine’s Day. But I want to check back and look over the course of the last month to see where we are with New Year’s Resolutions. Author Daniel Pink, in his book When, expounded on the importance of timing and how beginnings (like a new year) are good times to start new routines. Which is why New Year’s Resolutions make so much sense.

The fitness and wellness industries certainly take advantage of this. Peloton (NASDAQ: PTON), a home-fitness leader, struggling even as gyms were closed due to the pandemic, saw shares surge as they reported less of a loss in revenue as a result of a membership increase. Although the company saw a 10% increase in membership year over year, the company’s losses are largely due to its lackluster sales of its bikes, treadmills, and now rowing machines.

Planet Fitness (NYSE: PLNT) took a different approach and instead of focusing on New Year’s Resolutions (even though it ran its campaign in January), drew attention to low energy that we often feel during the winter months. The company’s campaign suggested that exercise (especially that done at a Planet Fitness gym) would cause a boost in energy and physical as well as mental improvements. They’re not wrong. Exercise releases “feel good” endorphins and when it’s cold and gray outside, those come in handy.

Group fitness is a way to socialize and work towards fitness goals. Xponential Fitness (NYSE: XPOF) offers a number of brands supplying group fitness classes, from cycling, rowing, to barre and stretching. The company’s 10 brands serve over 2,600 studios in the US and Canada. It also saw a 44% Q3 jump in revenue compared to the previous year. Sure, boutique fitness, which Xponential Fitness provides, had taken a hit during the pandemic, but it has certainly seen a comeback. We will see if any habits were formed during the month of January for those revenues to be maintained or grow.

an image of a young woman running on a treadmill in a gym

I have experience in the boutique fitness industry and know how hard it is to acquire and maintain customers. Unfortunately, many people don’t want to put in the physical effort to make a healthier change and want a quicker fix. Companies like WW International (NASDAQ: WW) offer food and coaching to help reduce calories and private company Noom takes a more psychological approach to teaching healthy lifestyles. Pharmaceutical companies have been working on weight loss medications for decades, like Semaglutide (“Wegovy”) from Novo Nordisk (NYSE: NVO) or Orlistat (“Alli”) from GSK (NYSE: GSK).

There are certainly plenty of options for investing in fitness and wellness. The industry is actually quite similar to the stock market – emotional and trendy and with plenty of highs and lows. I can see how these companies might be interesting for a certain type of trader – one who might buy a gym membership in January but then stop exercising by March.

As a long-term investor, and one who has experience with the fitness industry, I’m happy to just watch the trends and find different ways to stay healthy. For me, fitness and wellness are things I think about everyday and like investing, is a practice for the longer term.

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