There are so many unique facets to the new Coronavirus economy. With it is a myriad of losers like airlines, hotels, and restaurants. But also a new group of winners are emerging that I have discussed such as tech for work @ home, cleaning supplies, and “stock up” retail winners.
Now let’s turn our attention to another group of stocks that are enjoying tailwinds from more people staying at home and thus working out at home; Peleton Interactive (PTON), Fitbit (FIT), Nautilus (NLS), Simply Good Foods (SMPL) and Planet Fitness (PLNT).
Peloton Interactive (PTON)
PTON is an obvious choice at this time. They were already a great growth story with their growing line up of at home fitness equipment along with streaming subscription model. Now PTON has a new growth driver in that folks are forced to work out at home no doubt leading to a surge in subscribers.
Note that my wife and I got a Peleton bike almost 2 years ago and are big fans. So I suspect that all these newcomers will be happy to stay with their PTON subscription well after the Coronavirus scare comes to an end.
TipRanks reports the analyst consensus for PTON is a strong buy with an average price target of $36.20. It is particularly notable that 5 Star analyst from Canaccord Genuity, Michael Graham, recently reiterated his buy with street high $40 target.
FIT’s one-year chart is a sight to behold. The stock dipped all the way down to $2.85 this past summer only to rapidly ascend to the $7 mark when fall arrived. FIT has traded sideways amidst the market volatility induced by the coronavirus outbreak. But sideways is a lot better than down 25-50% like so many other stocks.
Though FIT missed its fourth quarter earnings and there are looming problems with the company’s Google deal, the masses are turning to Fitbit devices in masse rather than personal trainers and gyms at the moment. PTON is the shiny and new way to workout on your own. But FIT has its fans too which could lead to more upside given how beaten down shares were from the highs several year ago.
Rewind to the spring of 2019 and it appeared NLS would be in dire straits for the foreseeable future. The stock slid down to the $1 range last year yet bounced right back to $3.93 in January of 2020. Today, NLS trades under $3, largely because there is hope that people will scoop up NLS home exercise machines to stay fit while gyms are closed. It was merely one week ago when NLS traded for $1.29.
Now that the masses are exercising at home, NLS should prove profitable for years to come. The company’s recent solid performance just might propel its stock toward its 52-week high of $5.95. At the moment, NLS trades slightly below TipRanks’ average analyst price target of $4, making it quite the intriguing home fitness stock.
Simply Good Foods Company (SMPL)
OK, with this stock we are going a little bit on a tangent. Staying fit at home is not just about exercise, but also about nutrition. Especially plant based protein found in the products of Simply Good Foods (SMPL)…formerly known as Atkins.
Food is considered a safe haven during rough times. Add in the craze for plant based sources of protein that is driving demand for Beyond Meat, and you understand the attractiveness of SMPL where analysts are expecting 25% year over year growth which is a serious acceleration from the past.
TipRanks reports the average analyst price target for SMPL is slightly in excess of $30, making the stock’s current sub-$20 price tag quite tempting. But really it is the growth story of this protein snack trend that is not likely to go away soon. So now is a great time to load up on SMPL for a likely long term outperformance.
Planet Fitness (PLNT)
Before we get into the heart of the PLNT story, I want to be clear that this company is being greatly harmed by the Coronavirus trend to work out at home. This has shuttered the doors of PLNT and most of their competitors. So PLNT is really more of a buy the dip story for when business gets back on track.
Now let’s roll back the clock. PLNT was one of the best growth stories in retail and fitness. Truly a non-stop string of earnings beats and soaring share price to a recent peak just under $90. Since then PLNT has gotten as low as $23.77. Ouch indeed!
The bounce last week in PLNT shares will prove to be short lived. Now shares are sinking back lower once again. However, I believe that any purchase of these shares under $40 and closer to $30 will prove to be very beneficial in the long as life gets back to normal and PLNT is able to flex some earnings muscle.
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PTON shares were trading at $27.04 per share on Wednesday afternoon, up $0.49 (+1.85%). Year-to-date, PTON has declined -4.79%, versus a -22.65% rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...
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