In this article, we will be taking a look at the 11 best weight loss stocks to invest in. To skip our detailed analysis of new developments in the weight loss industry, you can go directly to see the 5 Best Weight Loss Stocks To Invest In.
US Versus Peer Nations In Weight Loss Drug Prices
Physical fitness and weight loss are two things most individuals would have wanted to inculcate in their everyday lives at one point. Working on one's fitness can have direct physical and psychological benefits, making the weight loss and fitness market relatively large across the globe. This includes anything from fitness products and equipment providers to weight loss drug manufacturers and distributors. The providers of these products and services stand to gain quite a bit from the focus on fitness and weight loss that is so publicly widespread today. As such, the weight loss market, and the more specialized weight loss drug market within it, are steadily becoming viable investment options for many investors.
According to survey results released by the Peterson Center on Healthcare and the Kaiser Family Foundation on August 17, about 50% of adults in the US "would be interested in taking prescription weight loss drugs." This signifies that the market for weight loss drugs in the US is not suffering from demand in the least. However, the analysis presented by Peterson-KFF shows that the list prices for weight loss drugs in the US are significantly higher than those in peer nations such as Japan, Canada, Switzerland, and Germany, among more. For instance, the Mounjaro drug produced by Eli Lilly and Company (NYSE:LLY) is priced at a whopping $1,023 in the US, while the same drug is priced at $319 in Japan. This massive price difference makes the situation of the US weight loss market slightly worrying because it is resulting in many insurers dropping weight loss treatments from their list of insurance-covered healthcare treatments. At the same time, these drugs are too expensive for a regular American to pay for out of pocket, making them inaccessible to the general public who needs them.
The Weight Loss Industry Gold Rush
Despite the above, companies that are actively working on providing weight loss drugs, such as Novo Nordisk A/S (NYSE:NVO), or those that are contributing to this space through introducing weight management interventions, like Merck & Co., Inc. (NYSE:MRK), are still managing to profit considerably. For example, Eli Lilly and Company (NYSE:LLY) reported that its second-quarter revenue increased by 28% "as a result of volume-driven growth from Mounjaro, Verzenio, Jardiance, and Taltz." The company's Chair and CEO, David A. Ricks, commented that its second-quarter results were led by sales of its obesity drug, Mounjaro, alongside a strong performance from its Growth Products.
Novo Nordisk A/S (NYSE:NVO) is also trying its best to bank on the weight loss drug demand and is making moves to broaden its own weight loss portfolio. The company's Ozempic and Wegovy drugs are rapidly gaining popularity across the globe and on Wall Street. According to a Wall Street Journal article from this June, these drugs helped adults in a trial lose about 15.1% of their body weight in 68 weeks. Additionally, on August 10, CNBC reported that Novo Nordisk A/S (NYSE:NVO) announced its upcoming acquisition of Inversago Pharma, which is a private obesity drug-making company, for up to $1.08 billion. The acquisition is expected to be closed before the end of the year, and the final price for Inversago Pharma was said to depend on whether it "reaches certain development and sales goals." This acquisition is just one more step the company is taking to further capitalize on the "weight loss industry gold rush," considering the fact that it is already benefitting spectacularly from its involvement in this space. This is substantiated by Novo Nordisk A/S' (NYSE:NVO) report of its second-quarter sales this August, where the company stated that sales within its Diabetes and Obesity Care business increased by 36% during the second quarter.
These companies are not alone in their weight loss drug operations. Pfizer Inc. (NYSE:PFE) has also been testing two oral drugs and has announced that it will be moving forward with its danuglipron drug, presumably in an effort to not be left behind in the weight loss drug race. All in all, it is evident that despite existing problems within the weight loss market in the US, companies operating in this space are continuing to do well because of higher demand for weight loss products, treatments, and services. In light of the above, we have compiled a list of some of the best weight loss stocks to invest in. This list includes some top weight loss drug stocks alongside some of the other best weight loss companies in the world.
11 Best Weight Loss Stocks To Invest In
Our Methodology
We selected the best weight loss stocks by using Insider Monkey's hedge fund data for the second quarter. The stocks are ranked on the basis of the number of hedge funds holding stakes in them, from the lowest to the highest number.
Nautilus, Inc. (NYSE:NLS) is a fitness solutions company based in Vancouver, Washington. The company designs, develops, sources, and markets cardio and strength fitness products and related accessories.
Eight hedge funds were seen holding stakes in Nautilus, Inc. (NYSE:NLS) in the second quarter. Their total stake value in the company was $4.6 million.
Holding 3.3 million shares in the company, Armistice Capital was the largest shareholder in Nautilus, Inc. (NYSE:NLS) at the end of the second quarter.
As of August 8, Linda Bolton Weiser, an analyst at DA Davidson, maintains a Neutral rating on shares of Medifast, Inc. (NYSE:MED). The analyst also placed an $80 price target on the stock.
Medifast, Inc. (NYSE:MED) is a consumer staples company that manufactures and distributes weight loss, weight management, and healthy living products alongside other consumable health and nutritional products. The company is based in Baltimore, Maryland.
We saw 18 hedge funds holding stakes in Medifast, Inc. (NYSE:MED) at the end of the first quarter, with a total stake value of $80.5 million.
Like Novo Nordisk A/S (NYSE:NVO), Eli Lilly and Company (NYSE:LLY), and Merck & Co., Inc. (NYSE:MRK), Medifast, Inc. (NYSE:MED) is a highly popular weight loss stock investors should look at this year.
SRS Investment Management was the most prominent shareholder in Planet Fitness, Inc. (NYSE:PLNT) at the end of the second quarter, holding 6.9 million shares in the company.
Planet Fitness, Inc. (NYSE:PLNT) is a leisure facilities company that franchises and operates fitness centers under the Planet Fitness brand. The company is based in Hampton, New Hampshire, and sells fitness equipment to franchisee-owned stores in the US and Canada, among more.
Max Rakhlenko, an analyst at TD Cowen, maintains an Outperform rating on shares of Planet Fitness, Inc. (NYSE:PLNT) as of August 8. The analyst also placed a price target of $72 on the stock.
Planet Fitness, Inc. (NYSE:PLNT) was spotted in the 13F holdings of 23 hedge funds in the second quarter. Their total stake value in the company was $1.01 billion.
Baron Funds made the following comments about Planet Fitness, Inc. (NYSE:PLNT) in its fourth-quarter 2022 investor letter:
“Shares of Planet Fitness, Inc. (NYSE:PLNT), the leading franchiser and operator of low-cost fitness centers, rose after reporting strong results. The company reported system-wide same-store sales increased 8.2%, raised estimates for growth in net income, and authorized another large share repurchase. Membership grew to an all-time record, now fully recovered from the pandemic lows. New gym openings are somewhat constrained by availability of HVAC units, but we envision the pace of growth will accelerate and that the base of gyms can still double over time from 2,000 to 4,000. We believe that EBITDA can grow at a mid-teens rate long term on a declining share count and that the trading multiple can modestly expand, which will drive continued good stock performance.”
At the end of the second quarter, 24 hedge funds held stakes in WW International, Inc. (NASDAQ:WW), with a total stake value of $162.5 million.
WW International, Inc. (NASDAQ:WW) is a specialized consumer services company that provides weight management products and services across the globe. The company offers nutritional, activity, behavioral, and lifestyle tools. It is based in New York.
As of August 7, Linda Bolton Weiser, an analyst at DA Davidson, maintains a Buy rating on shares of WW International, Inc. (NASDAQ:WW). The analyst also raised her price target on the stock from $11 to $12.50.
Xponential Fitness Inc. (NYSE:XPOF) is another leisure facilities company on our list, based in Irvine, California. The company operates as a boutique fitness franchisor in North America and provides pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under its brands.
Guggenheim analyst John Heinbockel maintains a Buy rating on shares of Xponential Fitness Inc. (NYSE:XPOF) as of August 16. The analyst also placed a price target of $32 on the shares.
Xponential Fitness Inc. (NYSE:XPOF) was spotted in the portfolios of 26 hedge funds in the second quarter. Their total stake value in the company was $146.5 million.
Driehaus Capital was the largest shareholder in Xponential Fitness Inc. (NYSE:XPOF) at the end of the second quarter, holding 2.2 million shares in the company.
This is what Carillon Tower Advisers had to say about Xponential Fitness Inc. (NYSE:XPOF) in its first-quarter 2023 investor letter:
“Xponential Fitness, Inc. (NYSE:XPOF), a global franchisor of boutique fitness brands, performed well, driven by strong quarterly results coupled with upbeat guidance for the coming year. Xponential Fitness continues to grow new boutique fitness units while driving up the use of its existing units.”
As of August 3, John Baumgartner, an analyst at Mizuho, maintains a Neutral rating on shares of Herbalife Nutrition Ltd. (NYSE:HLF). The analyst also raised his price target on the stock from $13 to $17.
There were 28 hedge funds long Herbalife Nutrition Ltd. (NYSE:HLF) in the second quarter, with a total stake value of $549.9 million.
Herbalife Nutrition Ltd. (NYSE:HLF) is a consumer staples company that offers health and wellness products across the globe. Its products include weight management, targeted nutrition, energy, sports and fitness, and outer nutrition products. It is based in Los Angeles, California.
Like Novo Nordisk A/S (NYSE:NVO), Eli Lilly and Company (NYSE:LLY), and Merck & Co., Inc. (NYSE:MRK), Herbalife Nutrition Ltd. (NYSE:HLF) is a stock that is popular among many hedge funds today.