Volatility has started to pick up across the stock market following revelations about the new Omicron Covid variant taking off in South Africa and the Fed’s move to shift gears and start to focus on policy steps to tamp down inflation this week.
The volatility index is back above 30 for the S&P as a result. And investors are starting to wonder if cyclical growth stocks are still the place to be.
That suggests capital may start to flow toward industries that stand to be immune to monetary policy and pandemic risk factors. One such group is the active nutrition space.
According to a recent piece from ResearchAndMarkets.com, the sports nutrition market is expected to reach over $26 billion by 2026, growing at a steady CAGR of better than 10%. The research piece notes that sports nutrition products are undergoing mass adoption by recreational users and lifestyles users, with North America being the largest market for sports nutrition, accounting for well over half of the global market last year.
With that in mind, we take a look here at a handful of the most interesting names in 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. The All Others includes materials and online tools that are designed to assist Associates in building their businesses and in marketing products.
USANA Health Sciences Inc. (NYSE:USNA) recently announced that it is now teaming up with the Philippine Basketball Association (PBA) as the Official Nutritional Supplements of the PBA—ahead of the league’s second conference of its 46th season.
“As USANA continues to expand, we are fortunate to offer our products globally to a diverse athletic community,” says Dan Macuga, USANA chief communications and marketing officer. “To be able to partner with an established organization like the PBA is a testament to the integrity of our products, innovative research, and development efforts. We are thrilled to bring partnership to our USANA family.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action USNA shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
USANA Health Sciences Inc. (NYSE:USNA) managed to rope in revenues totaling $274.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -8.1%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($248.8M against $158M).
Torque Lifestyle Brands Inc. (OTC US:TQLB) is by far the most speculative play on this list, but it also could be a very interesting small-cap growth story in the making right now thanks to its majority owned joint venture, Zero Torque Manufacturing, which is picking up supplements manufacturing deals.
The cornerstone right now is its deal with GLAXON. And that deal is starting to really kick into gear and pay off.
Torque Lifestyle Brands Inc. (OTC US:TQLB) announced yesterday that GLAXON placed a $4 million purchase order with Zero Torque. GLAXON is one of the fastest growing and most innovative brands in the active nutrition space. That growth has been driven by disruptive thought-provoking branding, product education, and transparent supplements that provide lifestyle solutions. GLAXON products have already received multiple industry awards in less than two years since launch.
Zero Torque Manufacturing is the lead manufacturer for GLAXON products. GLAXON has given Zero Torque an initial purchase order to produce and deliver $4 million of GLAXON branded supplement products over the next six (6) months, with the final delivery associated with this order scheduled for May 2022.
This purchase order follows the recent announcement of a partnership between GLAXON and GNC, one of the world’s largest global health and wellness brands. According to related communications, GLAXON will work with GNC to accelerate speed to market of its cutting-edge nutrition solutions and service the health and wellness goals of millions of consumers nationwide.
Torque Lifestyle Brands Inc. (OTC US:TQLB) president Leonard K. Armenta stated, “This order gets the ball rolling on what we believe will be an enormously lucrative relationship, driving a series of major orders as GLAXON products take the world by storm. GLAXON is the most disruptive new brand in the space. GNC is an industry powerhouse with the ability to drive mass distribution of GLAXON products at scale, and this puts Zero Torque in place as the exclusive manufacturer tied to that equation.”
Celsius Holdings Inc (NASDAQ:CELH) touts itself as a global company with a proprietary, clinically proven formula for its master brand CELSIUS and all its sub-brands. A lifestyle fitness drink and a pioneer in the rapidly growing performance energy sector, CELSIUS has five beverage lines that each offer proprietary, functional, healthy-energy formulas clinically proven to offer significant health benefits to its users.
CELSIUS is sold nationally at Target, CVS, Walmart, GNC, Vitamin Shoppe, 7-Eleven, Dick’s Sporting Goods, The Fresh Market, Sprouts and other key regional retailers such as HEB, Publix, Winn-Dixie, Harris Teeter, Shaw’s and Food Lion. It is also available on Amazon, at fitness clubs and in select micro-markets across the country.
Celsius Holdings Inc. (Nasdaq:CELH) recently announced preliminary financial results for the third quarter ended September 30, 2021.
The company posted revenue of $94.9 million, up 157% from $36.8 million in Q3 2020, domestic revenue increased 214% to $84.5 million, up from $26.9 million in Q3 2020, and international revenue increased 5% to $10.4 million, from $9.9 million in Q3 2020
The stock has suffered a bit of late, with shares of CELH taking a hit in recent action, down about -12% over the past week.
Celsius Holdings Inc. (Nasdaq:CELH) is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($61.4M against $93.4M, respectively).
Other key players in the sports nutrition space include Herbalife Nutrition Ltd. (NYSE:HLF), Simply Good Foods Co. (Nasdaq:SMPL), and Nature’s Sunshine Products Inc. (Nasdaq:NATR).
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