Benzinga - by Neil Dennis, Benzinga Staff Writer.
As another holiday season fades into memory, and we return to our desks — perhaps a little flabbier and a little hungover — will investors think about carrying over their New Year resolutions into their stock portfolios?
Most New Year resolutions involve personal pledges to be healthier — lose weight and cut back on the booze. It’s a time of year when, traditionally, memberships of fitness clubs increase and sales of alcoholic beverages decline following the seasonal blowout.
But can this be translated into the market performances of the stocks involved?
On the first day of trading in 2024, and despite a decline of 0.8% on the S&P 500 index, Planet Fitness (NYSE:PLNT) shares were up 0.7%, while Anheuser-Busch Inbev (NYSE:BUD) fell 0.5%.
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Top Priorities: Losing Weight
In a Forbes Health survey last month, nearly half of those polled said that improving their fitness was a top priority for 2024. Meanwhile, a third said losing weight and improving their diet were also top priorities. Only 3% said drinking less alcohol was important to them.But, typically, do New Year resolutions tend to last long enough to have any lasting impact on share prices?
Last year, between Dec. 30 and its peak on Feb. 2, the Planet Fitness share price climbed 9% — a fair performance in just over four weeks. However, it subsequently lost 48% in the broad market downturn, before rallying into the year-end. Over the year, Planet Fitness was down 7%.
Not much can be gleaned from this, however, as in the previous year Planet Fitness stock fell 6% in first four weeks following Dec. 31, 2021.
A similarly inconclusive picture emerges for stocks such as W.W. International (NASDAQ:WW), the owner of the WeightWatchers brand, and Peloton (NASDAQ:PTON), the home fitness group — both of whose shares were around 2% lower on Tuesday.
The Fleeting Nature Of NY Resolutions
It seems the main reason for this is that, although many of these companies see rises in membership in early January — often due to New Year promotions offering discounts for joining — they don’t tend to keep them for good.The Forbes survey suggests that the intent to keep New Year resolutions lasts for only two to four months before goal-setters, disappointed with their lack of progress, give up.
And what fried the statistics was the COVID-19 pandemic. Peloton’s shares soared to $170 as gym-deprived fitness fanatics bought into the idea of home training, while those with so much extra time on their hands, really were able to carry through on fitness goals.
However, once the gyms re-opened, Peloton’s shares went into sharp decline. From $170 in Jan. 2021, the shares are now worth just $6. Conversely, Planet Fitness, whose shares dropped to $24 during the pandemic, jumped to just shy of $100 in November 2022, and now stands at $74.
Losing Weight The Easy (But Expensive) Way
It seems now, however, that the easiest way to weight loss is through pharmaceuticals, such as Ozempic by Novo Nordisk (NYSE:NVO) and Mounjaro by Eli Lilly (NYSE:LLY).Thus, one can take the financial hit from the cost of treatment, by hedging on the gains these new wonderdrugs are creating for their companies’ shares.
Novo Nordisk’s shares have gained 50.7% in 2023 thanks largely to sales of its weight loss drugs, while Eli Lilly’s shares have jumped 60.7%.
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