In this article, we discuss the 10 best fitness stocks to invest in. If you want to skip our detailed analysis of these stocks and the fitness industry outlook, go directly to the 5 Best Fitness Stocks To Invest In.
The pandemic turned the fitness industry upside down last year. When the COVID-19 pandemic struck, approximately one-third of the world’s fitness clubs and studios were shut down by April 2020. According to a recent report by the global health and fitness association IHRSA, the US fitness industry alone lost $20.4 billion of revenue in 2020 as a result of temporary club closures and limited capacity enforced by local and state governments to limit the spread of COVID-19. Despite the setbacks, the gym and health club market is expected to grow by more than $100 billion over the next five years, according to Technavio’s market analysis.
With the consumers’ abrupt shift to virtual workouts, the interactive fitness market is expected to grow at a 7% CAGR from 2020 to 2024, reaching $4.81 billion, according to a market report by Technavio. Some of the leading players in the digital fitness market in 2021 include Peloton Interactive, Inc. (NASDAQ:PTON), NIKE, Inc. (NYSE:NKE), Lululemon Athletica Inc. (NASDAQ:LULU), and Apple Inc. (NASDAQ:AAPL).
Our Methodology
We identified the leading players in the fitness industry from interactive fitness players, nutrition, and fitness apparel. These are some of the most popular fitness stocks among the 873 hedge funds tracked by Insider Monkey. We ranked the list based on the number of hedge funds having stakes in each firm as of the second quarter.
We included only those fitness stocks that have positive analyst ratings and long-term growth catalysts.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Fitness Stocks To Invest In
10. Xponential Fitness, Inc. (NYSE:XPOF)
Number of Hedge Fund Holders: N/A
We’ll start our list of 10 best fitness stocks to invest in with boutique fitness franchisor Xponential Fitness, Inc. (NYSE:XPOF). The company has opened over 1,800 fitness studios in 48 states in the US and 11 countries in the world since its inception in 2017.
The California-based fitness company raised $120 million in its initial public offering (IPO) on July 23, 2021, with Xponential Fitness, Inc. (NYSE:XPOF) opening at a price of $12 per share. Currently, the fitness stock sits at a market cap of $758 million.
In the second quarter of 2021, the company’s revenue grew 67% to $36 million, up from $21 million in the second quarter of 2020.
On September 22, Raymond James analyst Joseph Altobello double upgraded Xponential Fitness, Inc. (NYSE:XPOF) to Strong Buy from Market Perform. Altobello likes the company’s valuation and believes that the fitness franchisor will have meaningful recovery in key metrics over the coming quarters with its leading position in the fitness market. The analyst set a price target of $14 for the stock.
9. The Hain Celestial Group, Inc. (NASDAQ:HAIN)
Number of Hedge Fund Holders: 26
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is an international organic and natural products retailer with a store presence in more than 80 countries. The New York-based food manufacturer ranks ninth in our list of 10 best fitness stocks to invest in.
The healthy food retailer is known for weight management products under the brands of Health Valley, Celestial Seasonings, Terra Chips, The Greek God, and Yves. On September 29, Rob Dickerson of Jefferies maintained a Hold rating on The Hain Celestial Group, Inc. (NASDAQ:HAIN) shares. Dickerson also increased his price target for the stock to $46 from $41 as he sees potential in the company’s plant-based food and drinks segment.
In addition, more hedge funds are long in The Hain Celestial Group, Inc. (NASDAQ:HAIN) in the second quarter of 2021, with 26 hedge funds holding the food retailer stock, up from 23 in the first quarter. The stock gained 28% in the past twelve months.
8. WW International, Inc. (NASDAQ:WW)
Number of Hedge Fund Holders: 27
WW International, Inc. (NASDAQ:WW) is a digital weight management service provider and it ranks eighth in our list of the 10 best fitness stocks to invest in. The New York-based company offers personalized coaching and weight management resources through its app. As of the second quarter, WW International, Inc. (NASDAQ:WW) had an end of period subscribers of 4.9 million where its subscription revenue totaled $272.9 million.
Additionally, the digital fitness company sells its consumer health products such as snacks and kitchen tools via its e-commerce platform. WW International, Inc. (NASDAQ:WW) announced revenue of $38.5 million in its product sales in the second quarter. Wendy Nicholson of Citi maintained a Buy rating and a $32 price target on WW International, Inc. (NASDAQ:WW) on September 30. According to the analyst, the digital fitness stock is well-positioned for a strong performance in 2022.
Miller Value Partners is the biggest stakeholder of the company as of the second quarter, with a $102 million stake. Overall, 27 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in the New York-based company at the end of June 2021.
7. V.F. Corporation (NYSE:VFC)
Number of Hedge Fund Holders: 32
V.F. Corporation (NYSE:VFC) owns a portfolio of outdoor, active, and work footwear and apparel but it is popularly known for its iconic brand Vans. According to data gathered by Sole Supplier, white slip-on Vans have seen a 7,800% increase in sales since the popular Korean series Squid Game premiered on Netflix. Shares of V.F. Corporation (NYSE:VFC) climbed 6.34% in September.
In the second quarter, the lifestyle apparel retailer increased its revenue in their active segment by 16% year over year to $1.39 billion, where Vans’ global sales increased by 8%. Among the company’s other active brands are Supreme, Kipling, Eastpak, and Jansport. Overall, V.F. Corporation (NYSE:VFC) had a revenue of $3.2 billion in the quarter, representing a 23% year-over-year growth.
On October 25, BTIG analyst Camilo Lyon kept a Buy rating on V.F. Corporation (NYSE:VFC) with a price target of $101 per share. Of the 873 elite funds tracked by Insider Monkey, 32 were long V.F. Corporation (NYSE:VFC) at the end of June, up from 31 in the first quarter of 2021. Ohio-based investment firm Diamond Hill Capital is the leading stakeholder of the company with 5.41 million shares worth $444 million.
6. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 36
Retailer giant DICK’S Sporting Goods, Inc. (NYSE:DKS) has outperformed in the previous months, returning over 121% to investors, year to date. The sporting goods company has benefited from the pandemic as shoppers bought everything from outdoor equipment to gym clothes.
Meanwhile, income investors were ecstatic when the Pennsylvania-based sporting goods retailer increased its quarterly dividend by 20.7% to $0.4375 per share in August. DICK’S Sporting Goods, Inc. (NYSE:DKS), which ranks sixth on our list of the ten best fitness stocks to invest in, saw an increase in hedge fund stakes in the June quarter, with a total of 36 funds having a share in the company, up from 31 in the first quarter.
On September 9, Goldman Sachs analyst Kate McShane remained bullish on DICK’S Sporting Goods, Inc. (NYSE:DKS), maintaining her Buy rating on the athletic retailer stock noting continued upside in the company’s golf segment. McShane set a $127 price target for the stock.
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Disclosure. None. 10 Best Fitness Stocks To Invest In is originally published on Insider Monkey.
