"Fat Stocks"

In today’s world COVID-19 is not the only pandemic we are fighting, there is another one that is currently off everybody’s radar– namely obesity!

Every year, obesity generates wagonloads of money for a number of companies. The entire industry is specialized and well-armed with products and services purporting to “solve the problem”.

There is even an index that tracks the performance of companies positioned to profit from providing services to obese people. The constituents of the index range from companies specialized in weight-loss programs, plus-sized clothing, dietary supplements, pharmaceuticals, and so on.

Seasonal Chart of the Solactive Obesity Index over the past 10 years

ChartDescription automatically generated

Source: Seasonax

Keep in mind that unlike a standard price chart that simply shows stock prices over a specific time period, a seasonal chart depicts the average price pattern of a stock in the course of a calendar year, calculated over several years. The horizontal axis depicts the time of the year, while the vertical axis shows the level of the seasonal pattern (indexed to 100). 

The index posts gains from March until June, displaying a noticeable seasonal trend over the past 10 years. But are there also “visible”  seasonal patterns of individual “obesity stocks”?

Weight loss companies on the seasonal radar

Single stock seasonality is not just a random event that enters the scene out of the blue. Individual stocks exhibit distinct seasonal patterns, either due to internal business reasons, or on account of various external drivers.

These external seasonal drivers include inter alia the weather as well as sentiment at certain times of the year. Below we present two obesity stocks whose seasonal patterns are potentially benefiting from both of these drivers.

The best way to prepare oneself for warmer weather is through a healthy diet and exercise. And who is a better expert on these matters than Medifast Inc (MED). 

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Jon Gluck 1 month ago Member's comment

There's actually an interesting story here about the relationship between obesity and Covid cases, but this isn't it. This is just a paid promo isn't it. I'm guessing Medifast?