New Year Resolutions are a money-making machine. A collection of the most common resolutions includes "lose wight," "get organized," "quit smoking" and "stay fit, eat better." Think of the opportunities.
Who would dare to "get fit" without first buying some new Nike (NKE) sneakers, workout outfit from Lululemon (LULU), or sporting equipment from Dicks Sporting Goods (DKS)? They join a gym, such as Lifetime Fitness (LCUT), and never mind if they stop going after the first week. That money is a one way cash flow – straight to the retailers.
And how about eating better? If they're committed they will try to do it right. Start by eating fresh organic food, go to Whole Foods (WFM) or The Fresh Market (TFM). Maybe they will join Weight Watchers (WTW). Buy vitamins (HLF).
Trade the Trend?
This surge of customers can do wonder for a company's bottom line to the point that it may contribute the bulk of the firm's annual revenues. But this activity is expected, just as Christmas comes as no surprise to toy stores, and is unlikely to impact share price in the long run.
As for the losing side of resolution spending, including the many fast food chains like McDonald's (MCD) and Burger King (BKW) that see a noticeable drop in customers early January, don't feel bad. Customers will surely be back. Their large bottom line can take the expected hit. Kraft's (KFT) mac and cheese will be back on the dinner table soon enough.
Bigger Picture
After establishing that new year resolution stocks are not a short-term play, we must consider the longer term. The reason "get in shape" and "eat better" top the resolution list is because they reflect American's greatest concerns. On average we're sick, overweight, and desperate for solutions. To that end investors may want to explore the key players in the health food and fitness industries.
It's been argued before that an identifiable long-term investment trend is with health. Consider three health food stocks Wholefoods, The Fresh Market and Herbalife. Their long-term growth is impressive, and a next generation of health conscious consumers is expected to push their value higher:
Fitness and yoga-mania have also sent luxury fitness apparel brands Lululemon soaring, The Gap (GPS) is also offering high quality fitness gear. Here we compare these names with Nike (NKE).
New Years Stock Infographic: A Pleasing Visual
Kapitall created the following infographic to help you understand the stocks that generate plenty of revenue from New Year resolutions.
No matter if the customers stick to their resolutions these stocks represent the top reactionary product and services to America's greatest issues. Are you willing to trade on that trend? Click on the image to access a variety of tools, such as these average analyst rating charts, to help analyze these names.
Written by Kapitall's Rebecca Lipman
Great blog! Sorry to change the subject, but, since Nashville is getting a lot of press lately, I’m looking for a great Nashville sushi restaurant or Japanese restaurant. Have you read any recent buzz? There’s a new one called Nomzilla Sushi Et Cetera, but I’ve only seen a few reviews. Here’s the address of this new Nashville Japanese Restaurant, 1201 Villa Place, Suite 101 Nashville, TN 37212 – (615) 268-1424. Thoughts? Thanks!