In light of people returning to the gym, five fitness stocks that investors can consider this summer are Brunswick Corp. (BC, Financial), Planet Fitness Inc. (PLNT, Financial), Peloton Interactive Inc. (PTON, Financial), Nautilus Inc. (NLS, Financial) and Technogym SpA (MIL:TGYM, Financial) according to the GuruFocus All-in-One Screener, a Premium feature.
According to research from financial services company Jefferies Financial Group Inc. (JEF, Financial), May traffic to gyms across the U.S. reached approximately 83% of January 2020 levels while online searches for “gyms near me” accelerated in May compared to April. Jefferies also said that search interest in gyms mimics that of levels normally seen at the start of the New Year, when people make resolutions committing to live a healthier lifestyle.
Traffic to gyms return as states lift Covid-19 restrictions
The research on gym traffic comes a few days after New York lifted its Covid-19 restrictions. Additionally, New Jersey Governor Phil Murphy said on Friday that the state has fully vaccinated 4.7 million people statewide, with 77% of the state population receiving at least one vaccine shot, smashing Joe Biden’s goal of having at least 70% of the U.S. population receive at least one vaccine shot by July 4.
As traffic to gyms return, investors can look for opportunities in the stock of companies that manufacture gym equipment and offer gym and fitness services. GuruFocus’ All-in-One Screener allows users to search for investing candidates within a specific industry or sector: For example, gym and fitness stocks are part of the travel and leisure industry.
Brunswick
Brunswick (BC, Financial) manufactures a wide range of recreational equipment, including fitness equipment through brands like Life Fitness and Hammer Strength. GuruFocus ranks the Mettawa, Illinois-based company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 9, a three-year revenue growth rate that outperforms over 84% of global competitors, and an operating margin that has increased approximately 5.7% per year on average over the past five years.
Gurus with holdings in Brunswick include Chuck Royce (Trades, Portfolio)’s Royce & Associates, Pioneer Investments (Trades, Portfolio) and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management.
Planet Fitness
Planet Fitness (PLNT, Financial) franchises and operates fitness centers across the U.S. GuruFocus ranks the Hampton, New Hampshire-based company’s profitability 6 out of 10: Operating margins are outperforming over 85% of global competitors despite net margins and returns on assets topping just over 60% of global leisure companies.
Gurus with holdings in Planet Fitness include Ron Baron (Trades, Portfolio)’s Baron Funds and Paul Tudor Jones (Trades, Portfolio)’ Tudor Investment.
Peloton
Peloton (PTON, Financial) operates three interactive fitness platforms: connected fitness products, subscription and other. The company generates the bulk of its revenue from the sale of connected fitness products, which include sales of exercise bicycles, treadmills and related accessories.
GuruFocus ranks the New York-based company’s financial strength 6 out of 10 on the back of a strong Altman Z-score of 8.49, an interest coverage ratio that outperforms over 72% of global competitors and a cash-to-debt ratio that outperforms 70% of global competitors, despite debt ratios underperforming more than 58% of global travel and leisure companies.
Gurus with large holdings in Peloton include Baillie Gifford (Trades, Portfolio), Chase Coleman (Trades, Portfolio)’s Tiger Global Management and Spiros Segalas (Trades, Portfolio)’ Harbor Capital Appreciation Fund.
Nautilus
Nautilus (NLS, Financial) designs home-fitness equipment through brands like Bowflex, Schwinn, JRNY and Nautilus. GuruFocus ranks the Vancouver, Washington-based company’s financial strength 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a strong Altman Z-score of 5.9 and interest coverage and debt ratios that outperform more than 80% of global competitors.
Technogym
Technogym (MIL:TGYM, Financial) manufactures fitness equipment and provides a wide range of wellness, physical exercise and rehabilitation solutions to individuals in Europe and North America. GuruFocus ranks the Italian fitness company’s financial strength and profitability 7 out of 10 on several positive investing signs, which include a strong Altman Z-score of 5.05, an interest coverage ratio that outperforms more than 76% of global competitors, and profit margins and returns that outperform more than 80% of global travel and leisure companies.
