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Stocks for the Weight Loss Crisis (MED, WW, MCTC, PLNT)

Today’s topic is pretty heavy. But the stocks involved certainly aren’t. As more and more Americans bust their belts during stay-at-home virus life, stocks in the fitness and weight loss space have taken flight. 

With that in mind, here are a few interesting names in the space that deserve some attention: Medifast Inc (NYSE:MED), WW International Inc (NASDAQ:WW), MCTC Holdings Inc (OTCMKTS:MCTC), and Planet Fitness Inc (NYSE:PLNT).

Medifast Inc (NYSE:MED) manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific.

It offers bars, bites, pretzels, puffs, oatmeal and cereal crunch products, drinks, hearty choices, pancakes, puddings, soft serves, shakes, smoothies, soft bakes, and soups under the Medifast, OPTAVIA, Thrive by Medifast, Optimal Health by Take Shape for Life, and Flavors of Home brands. The company markets its products through direct ecommerce platform and franchise weight control center channels. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

Medifast Inc (NYSE:MED) recently announced that it has appointed James (Jim) Maloney as Chief Financial Officer, effective July 20, 2020. In his role, Mr. Maloney will be responsible for leading the finance function including all aspects of financial planning and analysis, setting Medifast’s financial and capital allocation strategies, and managing investor relations. He will serve as a member of the company’s leadership team and report directly to Chief Executive Officer Dan Chard.

“We are pleased to welcome Jim to the Medifast team as we continue on our mission to offer the world lifelong transformation, one healthy habit at a time,” said Chard. “Jim brings deep public company experience, a strong focus on capital allocation and an ability to manage the finance function of a fast-growing, dynamic and complex business. He has been responsible for managing large operations for global companies to support business objectives and growth. He also has a history of building value, which will be important as we aim to deliver long-term sustainable growth through our differentiated approach to health and wellness.”

Even in light of this news, MED hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 17% in that time on strong overall action. 

Medifast Inc (NYSE:MED) pulled in sales of $178.5M in its last reported quarterly financials, representing top line growth of 7.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($105.3M against $81.8M).

WW International Inc (NASDAQ:WW) frames itself as a company that provides weight management services worldwide. The company operates in four segments: North America, Continental Europe, United Kingdom, and Other.

It provides a range of products and services comprising nutritional, activity, behavioral, and lifestyle tools and approaches. The company offers various digital subscription products to wellness and weight management business, which provide interactive and personalized resources that allow users to follow its weight management program via its Web-based and mobile app products, including personal coaching products; and allows members to support each other by sharing their experiences with other people on weight management and wellness journeys. 

WW International Inc (NASDAQ:WW) recently announced that WW Health Solutions has been added as a new wellness and weight management solution to CVS Health’s Point Solutions Management offering. WW Health Solutions aims to propel happier, healthier, more productive workplaces and make wellness more accessible. Joining the Point Solutions Management platform will enable employers and plan sponsors that use CVS Caremark for pharmacy benefits management to access WW Health Solutions with simplified contracting, preferred pricing, and streamlined eligibility and billing processes.

The new offering makes it easier for plan sponsors to add WW Health Solutions to their benefit packages – providing their members and families with tools that will positively impact health and culture, and promote sustainable behavior change. Through the collaboration, plan sponsors can offer their members WW digital offerings, which are accessible virtually anywhere, to meet members where they are, helping them along their weight loss and wellness journeys.

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. WW shares have been relatively flat over the past month of action, with very little net movement during that period. 

WW International Inc (NASDAQ:WW) managed to rope in revenues totaling $400.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 10.2%, 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 ($292.3M against $560.3M, respectively).

Cannabis Global, Inc. (OTCMKTS:MCTC), currently still trading as MCTC Holdings (OTCMKTS:MCTC), is certainly the most speculative name on this list. But it very well might also be the one with the greatest upside potential.

The company has developed a method for commercial-scale production of the rare cannabinoid known as tetrahydrocannabivarin (THC-V). This compound has been anecdotally associated with naturally appetite suppression and weight loss. The company is now moving to establish this on a more scientifically founded platform.

Cannabis Global, Inc. (OTCMKTS:MCTC), to that end, just announced this week the selected protocols for its animal study designed to determine if administration of rare cannabinoid Tetrahydrocannabivarin (THC-V) promotes appetite suppression and/or weight loss.

The Company plans to begin the Mouse Study next month, which will run for a period of six weeks. The goal of the study is to determine if Diet-induced Obese (“DIO”) mice experience weight loss after administration of THC-V and, if so, to determine the extent of the weight loss.

The results could be a game-changer for this stock because no one else, as far as we are aware, has the ability to produce THC-V at commercial scale, which would theoretically grant MCTC a monopoly on a magic diet drug. So, stay tuned.

MCTC Holdings Inc (OTCMKTS:MCTC) had no reported sales in its last quarterly financial data. But it appears to be closing in on commercial-stage operational gains for shareholders and has a strong IP edge in the industry. In addition, with this agreement, the company should now be in a position to start booking topline growth in the cannabis delivery-based dispensary retail business.

Planet Fitness Inc (NYSE:PLNT) franchises and operates fitness centers under the Planet Fitness name. It operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The Franchise segment is involved in franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico, and Australia. 

The Corporate-Owned Stores segment operates corporate-owned stores in the United States and Canada. The Equipment segment engages in the sale of fitness equipment to franchisee-owned stores in the United States. 

Planet Fitness Inc (NYSE:PLNT) recently announced that members and guests will be required to wear a mask at all times while inside all open stores, beginning August 1. Currently, all Planet Fitness employees are required to wear masks. To date, the Company has approximately 1,450 locations open across 46 states, the District of Columbia, Canada, and Australia.

“As we continue to face the COVID-19 pandemic, amid an ongoing global health crisis, wellness has never been as essential to our collective community as it is today,” said Chris Rondeau, Chief Executive Officer at Planet Fitness. “Gyms are part of the solution and a key element of the healthcare delivery system, providing much needed access for people to exercise and stay healthy. Given our leadership position within the industry, we believe it’s our responsibility to further protect our members, employees, and communities so that we can all safely focus on our health, which is more important now than ever before.”

The stock has suffered a bit of late, with shares of PLNT taking a hit in recent action, down about -5% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -14%. 

Planet Fitness Inc (NYSE:PLNT) pulled in sales of $127.2M in its last reported quarterly financials, representing top line growth of -14.5%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($610.7M against $180.2M).

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