Health And Fitness Stocks: The Last Reopening Trade

To be savvy investors, we need to learn how to connect the dots. There are so many investment clues to discover all around us if we spend time observing. One of the dots I think I've connected is that old school health and fitness stocks are an intriguing laggard reopening trade. I'm not talking Peloton, but gyms.

We are clearly in a bull market. You may chase momentum if you want. I've certainly kept buying many of the tech growth names on the way up in my portfolio. However, the contrarian in me also likes to buy unloved stocks that eventually could come around.

Since the beginning of 2021, I've been steadily diversifying into banks and old economy stocks after tech did so well in 2020. But I'm still too overweight tech. Therefore, I'm still looking for new names.

As a disclaimer, this post is not investment advice. Please do your own due diligence and invest at your own risk.

I am writing out my thoughts on why the health and fitness sector looks like a buy today. I always go through a similar type of analysis before I make any investment decision. It's the financial analyst in me from my days working on Wall Street. I find the exercise fun and also helpful for uncovering blindspots.

Why I Began Looking For Health And Fitness Stocks To Buy

My catalyst for looking at health and fitness stocks is because my wife and I went out as a couple to a social gathering for the first time in a year. We met up with new preschool parents for a casual drink outdoors.

During our outing, I realized I was self-conscious about my hair because I hadn't gone to a professional barber in 18 months. Every three weeks, I've been cutting my own hair with my $24 clippers. Frugality for the win! As a result, I wore a baseball cap.

While having drinks with the preschool parents, two mothers mentioned they had gained a lot of weight since the pandemic began. As I didn't know what they looked like before, I said nothing and just smiled. What I should have said was, “You look just fine the way you are,” but I was out of social practice.

After seeing how nicely the others were dressed, I decided to buy some new polo shirts and a sweater from Lacoste. I was in the Union Square shopping area, so I figured why not buy some new clothes to replace my 10-year-old ratty t-shirts. However, when I tried on a classic fit size Medium, the shirt was tight. Therefore, I went with a size Large that snugged my guns.

Immediately, I thought, If I'm going to spend money buying new clothes, I had better stay in shape so I can wear them forever. Further, when it comes to looking good, I think 70% is in how fit you are and the remaining 30% is what you wear.

It was when I was at the cash register that I thought about looking for health and fitness stocks to buy. After all, one of my consumption rules is to spend money only off investment gains. It's like an automatic reaction whenever I want to buy something I don't need.

Why Health And Fitness Stocks Look So Attractive

1) Big Time Weight Gain

According to an American Psychological Association survey, 42% of respondents said they had experienced weight gain since the pandemic started. While 18% said they experienced undesired weight loss. Wish I had that problem!

Among those who reported undesired weight gain, the average gain was 29 pounds. Roughly 50% of those who reported undesired weight gain said they had gained more than 15 pounds. 10% said they had gained more than 50 pounds.

According to the survey, women were more likely than men to report undesired weight gain (45% vs. 39%). However, men who experienced undesired weight gain reported gaining more weight than women did (37 pounds on average, vs. 22 pounds).

According to the CDC, in 2010, the average weight of a man in America was 197 pounds, while the average weight of a woman in America was 166 pounds. According to a 2020 Gallup poll, the average weight for a man was 200 pounds and the average weight for a woman was 162 pounds.

Either way you cut it, Americans should probably slim down a little given average heights aren't much taller from 30 years ago.

Average weight for men and women

Gaining 5-10 pounds in one year is par for the course as we get older. I've gained about five pounds over the past two years. However, gaining 29 pounds in one year seems excessive. Therefore, there should be a strong desire to lose weight in the coming year, especially as many more people return to work.

2) Good Timing

What are the two most popular new year's resolutions every year since the beginning of modern history? Losing weight and increasing wealth. Given we've been in a raging bull market, the increasing wealth goal is handling itself. Staying in shape, however, has not for millions of people.

The desire to lose weight generally starts sometime towards the end of the year and is strongest through the first quarter. Then, thanks to human nature, people start slacking off in 2Q. By the start of 3Q, we're back to where we started. Then, the cycle repeats.

1H2022 should go down as one of the strongest years in history for the public to want to lose weight. Heck, maybe I should temporarily turn Financial Samurai into a health and fitness site so we can all temporarily get fitter! Better yet, maybe I should just buy a health and fitness website before the new year.

The social pressure to get back to pre-pandemic weight and look better in front of your peers will only boost demand for gym memberships, equipment, and supplements. If I can feel the peer pressure to get in better shape as someone who goes out once in a blue moon, I'm sure millions of others who see coworkers every day will as well.

Therefore, you want to buy health and fitness stocks before the health and fitness hype happens in 1Q2022. You also want to be long health and fitness stocks before these companies report strong 1Q and 2Q results. 1H2022 earnings should compare favorably to 1H2021 since 1H2021 was still a highly uncertain time.

3) Many Reopening Trades Have Already Rebounded

Although not entirely back to pre-pandemic highs, most airlines and hotel stocks have rebounded greatly from their 2020 lows. See names such as Hilton Worldwide (HLT), American Airlines (AAL), Airbnb (ABNB 8X higher than when they raised capital from Silver Lake in 2020).

Meanwhile, demand for private hospitality real estate is also very strong. I've observed a number of hotel deals get filled up very quickly in recent months.

4) Anecdotal Evidence At My Club Is Strong

In 2020, my tennis club was largely empty due to the pandemic. Even though tennis is one of the safest pandemic sports to play, I could always get a court, even after normal working hours.

Starting around September 2021, I noticed I sometimes had to wait for a court. It didn't matter whether I was coming at 11 am or 2 pm on a weekday, the courts were often busy. Forget about walking onto a court at 5 pm. In addition, the indoor dining area is frequently packed with elders in their 70s and 80s as the fear of COVID dissipates.

Given the busyness of the club, the club even resorted to hiring valets for our usually empty 50-car parking lot! Valets during the weekdays? Incredible.

I see the demand going up for health clubs with my own eyes. And from a waiting list perspective to join my club, it has gone from just several months in 2020 to two years.

People want to mingle, exercise, and belong to something again.

Life Time Group Holdings (LTH)

After formulating my thesis on health and fitness stocks, I went looking for something to buy. Names such as F45 Training (FXLV, $1.2B market cap), Xponential Fitness (XPOF, $756M market cap), The Beachbody (BODY, $1.6B market cap), and Planet Fitness (PLNT, $6.75B market cap) popped up.

However, what I found most interesting was a company called Life Time Group Holdings (LTH), which had been a publicly traded company before it went private in 2015 for about $4 billion.

The health club, which was founded in 1992, had about 1.4 million members as of July 31, and more than 150 centers located across the United States and Canada. These centers are massive 120,000- 150,000 square feet wellness centers. There's also an additional 60,000-70,000 square feet of outdoor space.

The CEO, Akradi, says his centers “deliver a Ritz Carlton or Four Season experience.” Sounds good to me. I'd like that.

Here are some of the amenities in its wellness centers:

  • Top-of-the-line fitness equipment
  • Spacious locker rooms
  • Group fitness studios
  • Indoor and outdoor pools
  • Bistros
  • Indoor and outdoor tennis courts
  • Basketball courts
  • LifeSpa
  • LifeCafe
  • Childcare and Kids Academy learning spaces (so important for parents!)

Many gyms were forced to shutter starting in March 2020 due to Covid-19 pandemic restrictions. Life Time was no exception. LTH, which did not collect any fees from members while its centers were closed, reported a loss of $360 million on revenue of $948 million in 2020. In 2019, it reported a profit of $30 million on revenue of $1.9 billion.

The numbers aren't great, however, revenue in the first half of 2021 was $562.5 million, an increase of 17.9 percent year over year. But the company still lost $229 million during this time period. The bet is whether the company can minimize its losses and get back to profitability before its cash runs out.

By the way things are going, hitting $1.9 billion in revenue again in 2024 looks highly feasible. After being forced to streamline operations in 2020 and 2021, margins could expand in 2022 as well.

Buying Below IPO And Privatization Price

Life Time Group recently went public again at a price of $18 a share. The company raised about $702 million to help pay down its ~$2.4 billion in debt and run operations.

At the time of this article, the company has a market capitalization of about $3.25 billion, or about 19% below where it went private in 2015 and 6% below its IPO price. In other words, if I buy now, I get to invest below where private equity titan, TPG invested. That's hard to do.

Although having $2.4 billion in debt is a lot, it's not so much now that LTH has $702 million in cash from the IPO plus the ~$100 million in cash it already had on its balance sheet. Just imagine having a $2.4 million mortgage and $802,000 in cash or a $240,000 mortgage and $82,000 in cash. Totally manageable, especially if cash flow / rent is improving.

Personally, I'm willing to buy LTH in the $16.50-$17 range. I believe people will come rushing back to its wellness centers in 2022. The company trades at almost half the EV of Planet Fitness, the “gorilla” in the space which has performed decently. With 120,000 – 150,000 square feet of indoor space, these wellness centers feel much safer than getting on a plane packed with people.

$800+ million in cash also buys LTH the time to wait for a recovery and improve operations. But of course, the company could falter if we see another big COVID surge that keeps people away. If that's the case, our healthcare system might collapse if we pack on another average 29 pounds in 2022.

More than anything, people want to socialize and get fit again. It doesn't matter how much money we have if we don't have our health.

One Final Dot To Connect

Yelp recently published its Q3 2021 Economic Average report, which investors should read. The below passage stands out:

In Q3 2021, consumer interest on Yelp increased above Q3 2020 levels for bowling (up 116%), waterparks (up 115%), Axe throwing (up 107%), stadium arenas (up 96%), indoor play centers (up 204%), lasertag (up 77%), and amusement parks (up 70%). This increase illustrates less hesitancy among consumers to participate in activities where the ability to social distance is limited or not possible.

After a year of home and outdoor workouts growing in popularity, gym and fitness classes are back on the rise. In Q3 2021, pilates (up 54%), pole dancing classes (up 56%), aerial fitness (up 74%), yoga (up 41%), barre classes (up 42%), and saunas (up 55%) all surpassed Q3 2020 consumer interest levels.

Ah hah! So the 70+-year-olds dining indoors at my club are a good indicator after all.

Management Can't Wait To Tell Us Something Good

Calendar Q3 ended on September 30. Therefore, health and fitness companies who have yet to report their calendar Q3 numbers will likely report a strong rebound in earnings. In other words, the earnings inflection point for health and fitness companies looks to be in 2H2021. And earnings should only get stronger in 1H2022.

Given LTH just went public on Oct 7, 2021, it should be in a quiet period until mid-November 2021. A quiet period is when management cannot speak to the public about the business. The rule avoids giving analysts, journalists, certain registered investment advisors, private investors, and portfolio managers an unfair advantage.

But as someone who always tries to connect the dots and predict the future to build wealth, it sure seems like management will have some good things to say once its quiet period is over.

Update: The 3Q2021 results are out here and it looks like everything is trending in the right direction. Sell-side analysts have also initiated coverage:

  • Guggenheim (Buy, TP $21)
  • Deutsche Bank (Buy, TP $21)
  • RBC Capital Markets (Outperform, $23 PT)
  • Goldman (Neutral, TP $23)
  • Morgan Stanley (Equal-weight, TP $21)
  • Wells Fargo (Hold, TP $19)

Further, Peloton reported terrible results with its inventory way up as more people are heading back to gyms to workout. The trend for gym stocks like Planet Fitness and Life Time Group is their friend. I'd love to hear feedback from you on the negatives of investing in health and fitness stocks and LTH in particular. The more negative the feedback the better. Do you have any other health and fitness stock ideas?

Again, this post is not investment advice. And in case you're wondering, I have no affiliation with LTH. If you are new to Financial Samurai, you can read the below posts to get a better idea of how I think and invest. I almost always put real money to work, otherwise, everything is just pointless jibber jabber.

Invest In Private Growth Companies

One of the most interesting funds I'm allocating new capital toward is the Innovation Fund. The Innovation fund invests in:

  • Artificial Intelligence & Machine Learning
  • Modern Data Infrastructure
  • Development Operations (DevOps)
  • Financial Technology (FinTech)
  • Real Estate & Property Technology (PropTech)

Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. In addition, you can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments. 

Related posts:

Liquid Courage: The Biggest Benefit Of Cash (why cash is not trash and mentioned Chinese internet stocks)

How To Predict A Stock Market Bottom Like Nostradamus (thought process on buying stocks aggressively in March 2020)

The COVID Variant Investment Thesis (thought process if there is another variant surge)

Big Risk-Averse With Health, Risk-Loving With Money (make sure your health is your top priority)

The Ultimate Financial Security: A Strong Mind (a recap of investing in health and fitness stocks)

Rent Out, Sell, Or Create A Wellness Center

43 thoughts on “Health And Fitness Stocks: The Last Reopening Trade”

  1. Peloton reported bad results. Stock is down 25% after reporting.

    Reason? Less people are buying their equipment and working out at home, more people are going to the gym and elsewhere.

    1. Just for fun and to follow along, I bought 300 LTH @17.08 after your posting this story.
      We are up almost 15%. PTON is off 70% from its high in Jan…OUCH

  2. $PTON pullback gives a decent entry as well. I’m biased as well and will own this stock long term.

    1. I’m in my mid 30’s have raced enduro (mtn.) at an earlier point in my life and have a couple have/had a couple of road bikes as well. You can buy an entry level or slightly above road bike and a turbo trainer/spin trainer for as much or less than this setup. Casting videos or streaming to a TV is not difficult either. I guess I just don’t see the allure or value the lack of flexibility products like this offer. For the cost of Bike+ you could by a standalone trainer (Shimano, etc.) and the above bike for outdoors as well for even less hassle.

      The company is also running in the red, even with revenues roughly doubling year over year for the last 3-4 years. They have sold a little over 2 million units and believe their market is roughly 20-25 million and at that point they rely on repurchases and a 39 monthly fee per household (if they ever reach that lofty number). The bikes have been sold for ~20% off for quite a while now, which is surprising given supply chain and material shortages that have existed for ~1.5 years now. To me other factors at play will limit them, as far as reopening of fitness facilities and vaccine uptake/new therapies.

      The Ohio factory could be to little too late and probably should have happened 3 years ago as opposed to the current period in time (as far as momentum is concerned). They then need to staff the factory given the labor market, which will be interesting. Taiwan is already cheaper labor-wise and adding the cost to attract labor in the U.S. for the Ohio factory now will be an interesting recipe for their unit cost as well.

      I saw the ticker kicked around quite a bit during the pandemic, granted many people made money on the run up. A lot of people bought in end of 2020/early 2021 and the most of the mentions now seem to bag holders from purchasing around the previous peak(s).

  3. There’s a Lifetime 15 mins from my house, it seems pretty busy and nice. I went as a guest once. It’s like a fitness resort. I can see people wanting to spend time working out and socializing there. You’re only thinking of holding it for 6 or so months right? When does their fiscal year end?

    Personally I have a home gym in the basement.

    1. Thanks for the intel! A resort-like fitness atmosphere is exactly the feedback I was hoping for.

      I love clubs and have been a member of tennis ones since 2001. And remember going to a tennis club in high school.

      Now more than ever, I really do believe people want to interact with others and get fitter. Pent up social demand.

  4. Not a re-opening trade, but I’m heavy in TPCS. TechPrecision mainly manufactures submarines and recently completed their acquisition of Stadco which does helicopters. With current global tensions with China, Russia, etc. and the bull run we’re entering in defense spending this seems like a great play to me. Has worked out for me so far and we’re only just beginning.

    TPCS is planning to uplist as soon as possible which will also trigger buying from funds.

    1. Hmm, definitely doesn’t look like a reopening trade! Lol

      How come you didn’t share this idea sooner, before it ramped to all time highs? :)

      I’m looking for a contrarian plays, not stocks that have already made huge moves.

      1. Well, I won’t suggest you invest in it, but it’s just getting started. I would say lightly track and watch its progress over the coming year. It’s still not even at fair market value based on my research but it’s such a small unknown company that once it does breakout, get over $5, and jump onto the major exchanges, I’m not sure where it can run from there. Small float, pretty illiquid stock as it sits right now.

        I also really like SMSI (deals with TMobile, Verizon, and AT&T are all but secured) and IRIX (glaucoma treatment) right now. Those are my top 3 holdings.

        I just enjoyed a lovely 6 bagger on AEHR over the last 3-4 months. I’ve never experienced one pop quite like that! Was fun. All of this is in my Roth however so I don’t get to enjoy it for another 30 years :(

  5. I believe investing in telehealth, companies engaged in device tracking for health/diabetes, and general diabetes management are probably the better long term bets. Companies developing wearables (Apple, Med Tech companies), etc. ~5 years ago I would have said Livongo and they have since been acquired into a behemoth (Teledoc) for diabetes management/telehealth. Telehealth is now, just in the last ~1.5 years, started to be implemented fully in many healthcare institutions out of necessity.

    While telehealth is not a new idea, it was more buzzwordy prior to COVID and used as a I/S pie-in-the-sky/subject of Innovation style projects. Many Innovation style projects are small populations/study group types of things, not rolled out to full populations. Many the basis of empty trophies and internal puff piece articles to employees and never lead to permanence/full rollouts.

    I might be jaded, since I live the a top 3 Obesity state and work in clinical research. I don’t own any individual stocks based on the above anymore. I did own Livongo and sold it. I do own FSMEX though due to some of the above reasoning and what I do for a living.

      1. That is a bit more of a difficult question to answer. TDOC is still probably the best pure play. So many of them are crazy high P/E’s (1000’s). TDOC has come down quite a bit and owns Livongo. Diabetes supplies/tech would DEXCOM or TNDM. TNDM falls into that crazy high P/E category for the space. Allscripts and Cerner would be decent choices given their EHRs and associated applications for patients. EPIC would be better than those two due to MyChart, but unfortunately it is privately held/employee owned. I think someone else might have mentioned UnitedHealth Group (maybe you?), which is a good choice as well. That firm has its hands in all things it seems.

        In general medical tech/device/supplies are less heavily scrutinized (compared to pharma) and are constantly going through the iterative development to increase available demographics, etc. BSX, Abbott, Medtronic, Thermo Fisher and Edwards Life Sciences are all well known. Most of these are also pushing hard into neuromodulation implantables. Providing relief from Parkinsons to ongoing urinary incontinence. Most of the 5 companies have large Cardiology and Vascular portfolios, which are big money makers.

  6. Well since you brought up fitness stocks, what are your thoughts on about Beachbody (BODY)? I asked you first. ;)

      1. I thought from your post you looked at it. I bought it as a SPAC which I regret, but i believe their business model is promising. Personally I went back to a gym, but I know so many people subscribing to home fitness offerings and I believe the at-home consumer behavior is sticky. We will see.
        So, what about BODY? Your thoughts?

  7. Interesting and compelling idea. I love when you talk stocks. My reopen plays are Live Nation and Textainer group Holdings [shipping container rentals] Both have done fairly well.

    The reason I like your pick is that it’s way more than a gym. You get the gym part that I kinda agree with the other commentators, blah, but you get the social club with it. Hell, even I would join a gym if I didn’t have to exercise.

    1. Hahaha, I hear you! Do a couple sit-ups and off to the gym bar with your buddies to drink some whiskey and play some dice! Can then tell our spouses we worked out. No lie.

  8. Manuel Campbell

    Did you considered Nautilus (NLS) ? Very good GYM brand. P/E of only 3.6 according to Yahoo! Finance. But I did not do thorough reseach, so I don’t know if there is a particular event that warrant this very low valuation.

    Personally, I’m not a fan of gyms businesses. There is a lot of competition. Like restaurants… But I think your idea as a trade during this reopening period is a great idea.

    My reopening investments are (sorted by size in my portfolio) :
    Couche-Tard (ATD.b) – convenience stores / oil / travel
    Suncor (SU) – oil
    Riocan (REI.un) – office and commercial real estate
    Airbus (AIR) – aerospace
    Disney (DIS) – entertainment
    Raytheon (RTX) – aerospace
    Transat (TRZ) – travel

    1. Damn, NLS does look cheap. Good call! Will do more research on it and see why it’s been such dog meat in 2021 so far. The thing is, I would think like Peloton, home fitness machines would decline in demand as people get out of the house more and go to social clubs like the ones owned by LTH.

      Personally, all I want to do is be out and about now with friends. But it’s still hard. No way am I going to want to stay inside on a treadmill! Then again, winter is coming.

      But man, NLS does look so cheap. Thanks for sharing your reopening ideas!

      1. Manuel Campbell

        Hi Sam,

        Thanks for your interest in NLS. I’ve looked more into it, but I was mistaken. Not about the valuation. But about the business… They sold their gym business long time ago (2011 or 2012 ?). They only make gym equipements today under various brands (Nautilus, Schwinn and Bowflex) and have a training app.

        So, it might be a good investment. But it’s more like a “COVID stock” than a “Recovery stock”. Not what we were looking for. They seem more like a competition to Peloton, but the valuation is much more attractive.

        In their last earnings report, they have negative expectations relative to very strong comparative sales during COVID as well as increased input costs to make their equipements.

        Sorry for my mistake. Maybe that’s worthwhile keeping on our watchlist.

  9. This is a great post, and as always, well researched and thought out. I have to agree with your analysis – the rebound of profitability of heath and fitness companies is not based on people changing their lifestyles and behavior. It’s based on people joining gyms and paying – and that’s what happens every January.

  10. I definitely ate a lot of unnecessary sweets during the height of the pandemic. I’m really trying hard to cut out sugar and processed foods now. I feel better when I eat healthier and exercise more regularly. Seeing a rebound in gyms makes sense to me. I don’t follow fitness or health stocks, but logically it makes sense. I think the biggest new years resolution in January is going to be to lose weight. It’s usually a very popular one, and given the reopening across states, I think it will be a big priority for everyone

  11. Nice trade. If you get it below what TPG paid, you are in good company.

    BTW – looks like TPG is going public.

  12. Dominic gomez

    I think youre underestimating new competitors like apple fitness / peleton. Their flywheel effect is addicting, why go to a gym when your phone can be a personal trainer?
    gyms have their value add just not sure if its enough to get people to may monthly fees at this point
    Also im really hesitant to get a membership after investing in personal workout equipment. Just my opinion

    1. Yep, fair enough. LTH is not so much a gym but a “wellness center” or club. We want to go work out, then swim, then grab a bite to eat with friends while our kids play with other kids at the play area.

      After 1.5-2 years of being antisocial, the craving for socialization is pent-up.

    2. I think this is why it has taken a while for fitness stocks to bounce back. Those who were serious about fitness got home gyms, and don’t want to double spend now.

      I think the industry as a whole is due a rebound, but with so many players it’s hard to figure out who’ll reap the largest rewards.

      I’m long on Planet Fitness because it is so entry level. Also, since it is cheap, it is perfect for people to jump back into the gym experience and also perfect for the attrition but keep on paying crowd.

        1. There is also a big difference for the majority of the population in spending $10-20 a month with no contract/fees at Planet Fitnesses/Anytime Fitnesses vs. 140+ a month for LTH membership. You also have YMCAs to consider, since the amenities are very comparable to LTH and pricing is typically more affordable in addition to other family benefits in the case of kids. The YMCA family membership is less than what one person costs at LTH based on Charlotte, NC pricing.

  13. Health and fitness are fads that come and go. I see no trends (long term) that indicate people will change behaviors that have been in place for decades and aside from a snagging the core segment of population who literally “live to be healthy,” I am not sure there is sustainable long term, above average, growth potential in most companies participating in this space.

    I personally believe some of your other suggestions as to real estate are better long term plays as well as many others. Entertainment (Squid Games made Netflix $900 million this year). Travel, Energy Financials etc.

    But diversification is a good thing. Having a small % of portfolio in LTH may be a good thing.

      1. Actually I do not think so. In terms of population at whole, we are not a people overly infatuated with health. I have seen no trends that indicate a huge momentum (meaning there is $ to be made) into fitness. Someone in the comments section indicated gyms see membership increases in January. It happens every year. It likely will for years to come. I am not sure that is new trend or impactful to making more $. Don’t get me wrong, these companies may grow but I cannot see macro trends here that create above average growth.
        I certainly could be wrong though.

        Most of my assets are in 30 or so companies -some dividend paying value w/growth potential MCD, Abbot Labs for example and some are growth (hi tech, pharma or electronics) such as Taiwan semiconductor, TI, Apple. Most positions have been held for years. Never sell and occasionally add $. NOT making changes is one of smartest decisions ever made. Just wanna hitch my wagon to people waaaay smarter than me who develop better mousetraps.

        I also own two rental homes in addition to paid off primary residence.
        Hope that answers second question.

        1. The Social Capitalist

          I believe you are mostly correct, but for the wrong reasons.

          Sam is looking at a social play based on the effects of Covid. I agree that’s not a long term trend, but it could make money for a bit. And he’s also been pretty good at timing.

          People don’t work out because society and govt. writ large have addicted us to high fat, high sugar diets in the suburbs creating a vicious cycle of tired, overweight pre-diabetics.
          Only drastic policy changes will impact this long term. We need to stop downing people who quit gyms- Often, inconvenient, solitary and feel like brightly lit dungeons.
          But there’s money to be made in the effort; the key is knowing when to get out. Again, I see about a year but I’m an awful, awful market timer.

          1. Let’s see what happens! Mgmt curiously announced they will be reporting results on Oct 28, during the usual quiet period. But since everybody gets to hear at the same time, it’s fair.

  14. Higher BMI linked to increased Covid-19 complications in mortality and morbidity has not (yet) convinced the population to exercise as a method to reduce risk. A pandemic has yet to influence the waist line, much less the bottom line. Unfortunately, hindsight for ROI was in the pharma arena. I shall look to the health and wellness companies over a longer past history than just through the pandemic times. Yr/ Yr reports will be misleading at best in the shorter time frame.

    1. Yeah, I’ve been invested in United Healthcare since 2015 once we had to pay for our own healthcare. If you can’t beat them, join them.

      If you have gained weight over the past 18 months and survived Covid, it’s like getting a free pass. But our luck might run out, so we might as well try to get fitter to reduce our chances of the complications.

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