Fight the Obesity Epidemic with These Three Stocks
Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
More than 35% of adults and 17% of children and adolescents in the US are obese. The Center of Disease Control and Prevention could not be more specific about the trend: “During the past 20 years, there has been a dramatic increase in obesity in the United States and rates remain high”. As many countries around the world change their eating habits and physical activity routine, the crisis is expanding globally.
The problem is being addressed by many governments and organizations, and sooner or later the trend will need to be reversed. The negative consequences of obesity are simply too important at both the individual and society level, we are not talking about esthetical preferences here, this is about the overall health, quality of life and life expectancy of people. The economic costs of obesity and related health problems make it worthy to devote some resources to preventing problems earlier instead of trying to fight them later.
Herbalife (NYSE: HLF) has helped a lot of people when it comes to having a healthier lifestyle. This direct marketing company sells weight management, nutritional supplement, energy, sports and fitness, and personal care products all over the world. The company has a lot of exposure to growing emerging markets in Latin America and Asia, and the direct selling model seems to be growing strongly in those countries, as it provides flexibility and independence which are highly valued by people looking for work opportunities in emerging markets.
The business is very profitable, with gross margins above the 80% level and sales have been expanding strongly as of late. Herbalife reported a 20% increase in sales and 25% growth in earnings per share for the last quarter in comparison to the same period of the previous year. Herbalife also increased dividends by 50% in sign of confidence about the future from the company's management.
Many people around the world, especially the young ones, are paying more attention to what they eat. The organic food movement is growing strongly and not only based on health reasons, people appreciate the taste and natural flavor that organic foods provide. Whole Foods Market (NASDAQ: WFM) is one of the clearest alternatives to capitalize on the organic food trend.
Whole Foods has been very successful at increasing sales and profits as in the last ten years it managed to increase sales at an average of 16.1% while operating profits grew by 17.2%. Those numbers will clearly slow down as the company becomes bigger, but there are still many opportunities for geographical expansion. International markets could be a big challenge but also a huge opportunity for Whole Foods.
We all know what doctors recommend to people trying to lose weight: eat better and exercise more. Sports and exercise don´t only have strong benefits for physical health; different academic studies have also shown important benefits for the psychological well being and overall mood of people. You can have better health, feel better mentally, and also have a lot of fun while practicing sports. It’s no wonder that people around the world are turning to sports for a better life.
No other company can be such a direct play on the global sports apparel and shoes market than Nike (NYSE: NKE). This is a tremendous marketing machine which has built a very valuable brand through decades of investing in memorable marketing campaigns and innovative high quality products. Nike has reported an average ten year increase in revenue of more than 16%, and there doesn’t seem to be much of a slowdown ahead as sales in the last quarter, as well as future orders increased by a 15% versus the previous year.
We humans sometimes commit some really big mistakes, but we are capable of changing our habits when the effort is worth it. The trend to a healthier living standard will keep growing around the world and these companies have what it takes to benefit.
Motley Fool newsletter services recommend Nike, and Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. acardenal has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.