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NutriSystem Inc. (NTRI), Novo Nordisk A/S (ADR) (NVO): Longer But Less Healthy Lives Will Benefit This Trio

NutriSystem Inc. (NASDAQ:NTRI), Novo Nordisk A/S (ADR) (NYSE:NVO), and Universal Health Services, Inc. (NYSE:UHS) should all benefit as Americans live longer, but face more illnesses than they did a decade ago.
NutriSystem Inc. (NASDAQ:NTRI)

Researchers from the University of Washington and the US Burden of Disease project reviewed health records from multiple countries to compare the health of citizens from nations around the world. One outcome from the work was the already well-known conclusion that the United States isn’t as healthy as our spending patterns would suggest compared to other nations.

Another, more interesting, finding was a comparison of the prevalence of illnesses between 2000 and 2010 in the United States. Three companies that stand to benefit from increasing rates of key illnesses are:

Insulin Specialist

According to MSNBC, the diagnosis of diabetes increased 58% between 2000 and 2010. Novo Nordisk A/S (ADR) (NYSE:NVO) is a giant in the insulin market, claiming to have around a 50% share of the world market based on volume. Although it sells products for other illnesses, it derives nearly 80% of its sales from its diabetes business.

The company estimates that there are over 370 million people with diabetes in the world, but believes that number will hit 550 million by 2030. Not surprisingly, The United States is one of the largest markets because of an aging and increasingly overweight population, factors that increase the incidence of type 2 diabetes.

The company’s revenues have tripled over the past decade, going from 26 billion Danish kroner to 78 billion, with earnings more than doubling from 14 Danish kroner per share to 38. Although a price to earnings ratio of around 22.5 isn’t cheap, it isn’t out of line with competitors in the drug space. Growth investors should consider Novo Nordisk A/S (ADR) (NYSE:NVO) as a way to benefit from increasing diabetes in the U.S. market and around the world.

Weight Loss and Diabetes Diets

Increased weight is one of the main ways that people wind up with diabetes. That’s why the American Medical Association (AMA) recently voted to recognize obesity as a disease. That should allow patients to receive third party payments for weight loss treatment. NutriSystem Inc. (NASDAQ:NTRI) should benefit from that important industry shift.

NutriSystem Inc. (NASDAQ:NTRI) designs and sells meal plans. Customers effectively give up their eating decisions and only eat what they are given. Having someone else cook all your meals is clearly expensive, which has led to sales falling each year since 2007 and the bottom-line falling into the red last year. With obesity being looked at as a disease, however, now could be a good time to buy the stock while it’s down and out.

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