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New Year Resolutions are a money-making machine. At the top of the resolution list is “lose wight,” “get organized,” “quit smoking” and “stay fit, eat better.” Think of the opportunities.
Who “gets 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 do it right. Start by eating fresh organic food, go to Whole Foods (
WFM) or The Fresh Market (
TFM). Maybe join Weight Watchers (
WTW). Buy vitamins (
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 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 other side, the fast food chains like McDonald’s and Burger King that see a
noticeable drop in customers early January, don’t feel bad. They’ll surely be back. Their bottom line can take the expected hit. Kraft’s (
KFT) mac and cheese will be back on the dinner table soon enough.
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 bitter” top the resolution list is because they reflect American’s greatest concerns. On average we’re sick and overweight, and desperate for solutions. To that end, investors want to explore the key players in the health food and fitness industries