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The health and fitness supplements market is growing strong and has all of the characteristics of a secular growth theme.
According to Grand View Research, the global dietary supplements market size was estimated at over $123 billion in 2019 and is projected to expand at a CAGR of 8.2% over the next 7 years, driven by factors such as rising health concerns and changing lifestyles and dietary habits.
Secular growth is the golden goose of portfolio theory.
Secular growth opportunities free investors from the vicissitudes of the business cycle. The broad market may seem overbought and overvalued. But the healthy living space is likely to continue to gain steam over time, weathering market downturns ahead of the pack and delivering outsized upside during market advances over coming years, according to analysts given structural shifts in cultural attitudes toward preventative health measures.
Key stocks in the space include USANA Health Sciences, Inc. (NYSE:USNA), Herbalife Nutrition Ltd (NYSE:HLF), GenTech Holdings Inc (OTC US:GTEH), Celsius Holdings, Inc. (NASDAQ:CELH), Simply Good Foods Co (NASDAQ:SMPL) and Nature’s Sunshine Products (NASDAQ:NATR).
We take a closer look below at some of the most interesting recent catalysts driving the space.
USANA Health Sciences, Inc. (NYSE:USNA) develops and manufactures nutritional, personal care and weight-management products. Its product line divided into four categories: Essentials, Optimizers, Foods, Personal Care and Skincare, and All Other.
The Essentials Nutritionals category includes vitamin and mineral supplements that provide a foundation of advanced total body nutrition for every age group. The Optimizers Nutritionals category consists of targeted supplements that support cardiovascular health, skeletal and structural health, and digestive health. The Foods Nutritionals category includes low-glycemic meal replacement shakes, snack bars, and other related products that provide optimal macro-nutrition. The Personal Care and Skincare includes science-based personal care products and Celavive.
USANA Health Sciences, Inc. (NYSE:USNA) recently announced that the company was proud to congratulate its Brand Ambassador Hidilyn Diaz on capturing historic gold for the Philippines by becoming the first Filipino to win top honors at the Games. Diaz secured her first place finish in the women’s 55kg weightlifting event with a total of 224kg that gave her a one point advantage over China’s Liao Qiuyun. Her performance also set two new Olympic records in the clean and jerk and total weight lifted, respectively.
“I don’t know what to say,” say’s Diaz. “It’s a dream come true. I just want to say that we Filipinos are strong. We Filipinos can compete here at the Olympics. We can do it. Please dream high. That’s how I started. I dreamed high and finally, I was able to do it.”
Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -6%.
USANA Health Sciences, Inc. (NYSE:USNA) managed to rope in revenues totaling $336.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 30.1%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($265.4M against $153M).
GenTech Holdings Inc (OTCMKTS:GTEH) has been possibly one of the most overlooked names in the market this year given its extraordinary strides in rolling up promising brands and product lines in the functional foods and supplements marketplace. Yes, it is a penny stock. But it’s an interesting one at this point, possibly in the midst of a major turnaround that could lead to very big things.
The company has acquired a number of promising commercial-stage products over recent months and is now actively investing in driving expanding distribution and sales growth in this product portfolio. By any reasonable account, we can expect rapid topline growth here over the near team. And yet, we have seen very little recognition from the market in terms of share pricing, which could spell a tremendous opportunity ahead in GTEH.
GenTech Holdings Inc (OTCMKTS:GTEH) announced just this morning that it has hired renowned outsourced sales agency Vista Brands to drive a widened distribution footprint and expanded sales for GenTech’s newly acquired product lines, Fizzique and MPB Snacks.
According to the release, Vista brands is led by its founder, Lisa Feddersen. Lisa has a stellar background, highlighted by her 12-year track record at Proctor & Gamble, the world’s leader in the consumer packaged goods marketplace, where she served as director of regional merchandising and account teams managing multiple notable brands including Tide, Crest, Cover Girl and Clairol. That led her to C-suite and sales strategist roles, driving revenues for multiple brands, and developing a rich network of high-level relationships with major retailers. She has also had deep experience with emerging supplement and functional foods brands in the Natural Channel (Whole Foods, Sprouts, Central Market) and has had direct success in expanding the market opportunity for these brands into the food, drug, and mass market space (“FDMC”).
According to the company’s release, Lisa has worked with Fizzique in the past, helping to drive sales on Amazon.com and Walmart.com as well as in Walmart physical stores. She is now actively engaging a wide set of major FDMC retailers, like Costco Wholesale Corporation (NASDAQ:COST), Amazon.com, Inc. (NASDAQ:AMZN), Walmart Inc (NYSE:WMT), and Target Corporation (NYSE:TGT), on behalf of Fizzique and MPB Snacks.
Fizzique was developed by industry veteran David Jenkins, the founder of Detour Bar, the first candy protein bar, and Designer Whey, the first protein designed with women in mind. Fizzique’s product line stands on the shoulders of seven US patents, and was voted Best Functional Drink and Most Innovative Protein Drink Brand in the US by the Supply Side West CPG Editor’s Choice US Food and Drink Awards in 2018 and 2019.
Fizzique has already successfully patented its entirely unique protein-infused clear sparkling beverage. MPB is a high-end protein cookie company that makes gluten free, high-protein snacks. MPB has driven over $2.7 million in sales over the past 42 months of operations as a privately held company in the sports nutrition marketplace before being acquired by GenTech in June. MPB products already have a broad existing distribution footprint that includes GNC, Circle K, FiveStar, Amazon.com, QVC, Walmart, Canteen, and BodyBuilding.com.
GenTech Holdings Inc (OTCMKTS:GTEH) president, Leonard Armenta, noted, “Lisa is a rock star in the CPG space, and she has already had tremendous success in cultivating strong interest among major retailers in Fizzique in the past. We have been rolling up brands in the supplements and functional foods space over the past year, and we are now ready to seriously invest in driving sales growth and market value across that portfolio of brands. Fizzique and MPB are both extremely compelling brand opportunities that fall right in Lisa’s wheelhouse, and we are very excited to have access to her elite talent, experience, and relationships.”
Herbalife Nutrition Ltd (NYSE:HLF) engages in the development and sale of nutrition solutions as a leading name in the health supplements and nutrition space.
The company operates through the following segments: North America; Mexico; South and Central America; Europe, Middle East, and Africa; Asia pacific; and China.
Herbalife Nutrition Ltd (NYSE:HLF) recently reported financial results for the second quarter ended June 30, 2021, with highlights including second quarter 2021 net sales of $1.6 billion, a 15% increase compared to the second quarter 2020, five of six geographic regions reported year-over-year net sales growth in the quarter with four of six regions exceeding 20% growth, and second quarter 2021 reported diluted EPS of $1.31 and adjusted1 diluted EPS of $1.522, compared to $0.82 and $0.972, respectively, for the second quarter 2020. Second quarter 2021 reported and adjusted earnings per share increased 60% and 57%, respectively, compared to the second quarter 2020.
“We delivered double-digit net sales growth for the fourth straight quarter,” said John Agwunobi, Chairman and CEO of Herbalife Nutrition. “All three of our core product categories grew double-digits, which includes the Energy, Sports and Fitness category, which increased 45% compared to the prior year.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 2% in that timeframe. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -5%.
Herbalife Nutrition Ltd (NYSE:HLF) managed to rope in revenues totaling $1.6B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 15.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($840.1M against $1.1B, respectively).
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