The other side of the losing-weight coin is “I’m going to start (walking/running/climbing/tipping cows) more.”
The top-of-mind stocks for this are old-guard apparel maker Nike (NYSE:NKE) and relative upstart Under Armour (NYSE:UA). Both have diversified athletic lines for men and women, and for just about every part of the body. UA is just an eighth of the size of Nike and has better growth prospects, but it’s also running against that dangerous wall where high growth clashes with expectations for super-high growth.
That said, you might think “How much bigger can Nike get?” Actually, there’s plenty of market left to eat. Sports apparel is a highly fragmented industry, and Nike is on top — but at only single-digit market share.
If you want to pander to the highfalutin folk, there’s Lululemon (NASDAQ:LULU), which sells high-end yoga and other athletic apparel primarily geared toward women. LULU has nearly tripled in the past two years, but now it’s trading at a lofty 45 times earnings. Plus, the company is facing pressure from cheaper competition. You actually might be better off gunning for an older company biting into Lululemon’s business, such as Gap (NYSE:GPS), which is darn close to a 2012 doubler itself, thanks in part to its less-expensive Athleta line.
Past that, you could see increased traffic at Dick’s Sporting Goods (NYSE:DKS), which in addition to selling traditional athletic apparel also covers weightlifting, outdoors and sports-specific gear. There’s also Big 5 Sporting Goods (NASDAQ:BGFV), a smaller operator whose stock had slumped since 2009, but is seeing a nice resurgence this year and recently crushed third-quarter earnings.