Life Time Fitness, Inc. (LTM), Town Sports International Holdings, Inc. (CLUB), Nautilus, Inc. (NLS): Workout Picks to Build Your Stock Portfolio’s Muscle

Page 1 of 2

Life Time Fitness, Inc. (NYSE:LTM)Investing in personal health and fitness is a smart lifestyle choice. Could extending this pursuit to investing in companies tied to physical wellness prove gainful as well? For one, the US health club industry is a sizable economic sector. It generated nearly $22 billion in revenue last year, with close to 60 million Americans patronizing fitness centers in 2012, says the International Health, Racquet & Sportsclub Association (IHRSA). For every five Americans age 6 or above, one is a health club patron, the IHRSA estimates.

The search for a stock pick which can draw a generous share of this business can start with Life Time Fitness, Inc. (NYSE:LTM). This Chanhassen, Minn.-based company had helped the US lay claim to having more health clubs than any other single country. As of this June, it operates 106 multi-use centers for fitness, family recreation, sports and athletic activities in 23 states encompassing 29 markets, including a Canadian province. Its total membership as of last year is nearing the 800,000 level.

A regional king

Regional dominance, on the other hand, is what propels the fortune of New York-based Town Sports International Holdings, Inc. (NASDAQ:CLUB). This company owns and operates 160 health and fitness facilities, making it the largest among operators in the U.S. Northeast and Mid-Atlantic. Three Town Sports clubs are also operating in Switzerland.

Membership as of the 2013 second quarter totaled 512,000 for Town Sports, unchanged from the first quarter this year. Nevertheless, the company’s second-quarter 2013 net income rose 14.4% year over year to $6.2 million from $5.4 million. Diluted EPS in the same comparative period increased to $0.25 from $0.23. Total revenue slid 1.7% to $120.1 million from $122.2 million, but the 2013 results gained favorable impact from insurance recovery related to Hurricane Sandy property damage claims.

Stronger financials

Life Time Fitness, Inc. (NYSE:LTM) likewise showed gains in its 2013 second quarter with its net income up at $33.2 million, or $0.80 per diluted share, from $30.3 million, or $0.73 per diluted share, a year earlier. A 6.9% revenue growth to $308.1 million was posted during this year’s second quarter, compared to the $288.3 million posted in the same 2012 quarter.

Moving forward, one of the major challenges for both Life Time Fitness, Inc. (NYSE:LTM) and Town Sports International Holdings, Inc. (NASDAQ:CLUB) is differentiating their service offerings from the health and fitness chains or studios which have been proliferating in malls and shopping centers in recent years. This trend was brought about mainly by the decline of retail tenants and the potential of gyms and spas as a magnet for mall visitor traffic across consumer segments, i.e. from the young fitness buffs to health-conscious baby boomers.

Home-based potential

A window of opportunity for growth, on the other hand, can be tapped if the two companies can draw additional club members from the quarter of a million or so Americans who prefer to exercise in the comforts of their homes. The significance of these fitness disciples as a factor in the business of health and fitness can be drawn from the market performance of Nautilus, Inc. (NYSE:NLS) which designs, develops, sources and markets cardio and strength fitness products to direct consumers.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!