Please ensure Javascript is enabled for purposes of website accessibility

Here's What These Fitness Stock Winners Have in Common

By Jon Quast - Jun 24, 2021 at 8:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Diversification of revenue and technology that overcomes social distancing helped some companies thrive in a world dealing with a global pandemic.

Clearly many businesses have been challenged by the COVID-19 pandemic. But in the fitness space, there are commonalities among the companies that have performed well. In this video clip from Motley Fool Live, recorded on June 15, Fool.com contributor Jon Quast discusses with Motley Fool bureau chief of consumer goods Jena Greene and bureau chief of healthcare and cannabis Corinne Cardina what helped some fitness companies succeed.

Jon Quast: Well, for my not-so-great stock was Under Armour (UAA -2.83%) (UA -2.49%). Like you said, it was a hard space to be in when you're an athletic apparel company and a lot of sports were canceled and what not -- supply chain issues across the board.

What is interesting, and I just want to tie this in maybe to the conversation we're having about connected fitness is -- we talked about Peloton (PTON -5.48%) -- but this played out in other ways during the pandemic and Under Armour as well. Their strongest part of the business, or one of the strongest, was their connected shoes. People were buying running shoes that have metrics that are tracked with the phone. They can go out on a jog. New users were doubling during the pandemic, so if there's one part of the business that did well it's that connected aspect. I think we're going to see a lot of companies merging this into more of a hybrid thing where you take the traditional and merge it with these new technologies.

Jena Greene: Yeah, I think if we've learned anything from the past year, the name of the game is people want to be alone together. They might not want to be breathing your air next to you on the treadmill, three feet away from your friend. But they do want to see what you're doing. It's fine to be able to log onto your Peloton and ride against a friend or compare your running route with your next door neighbor or whatever the case maybe. People still crave that social networking, even if it's not communal per se.

Corinne Cardina: I'll just throw in that the other trend to pull out on the stocks that did really well is diversification. Lululemon (LULU -0.57%), Peloton, Nike (NKE -0.86%), they all do apparel, footwear, gear. Then they have technology, hardware, like all these things. I think that is definitely something as an investor to keep an eye on, and that's what makes some of these businesses anti-fragile.

Greene: Definitely. Especially when it comes to acquisitions as well. Lululemon just acquired MIRROR last year. So, great points, all of you guys.

Corinne Cardina has no position in any of the stocks mentioned. Jena Greene owns shares of Lululemon Athletica. Jon Quast owns shares of Peloton Interactive. The Motley Fool owns shares of and recommends Lululemon Athletica, Nike, Peloton Interactive, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Under Armour, Inc. Stock Quote
Under Armour, Inc.
UAA
$9.95 (-2.83%) $0.29
Lululemon Athletica Inc. Stock Quote
Lululemon Athletica Inc.
LULU
$329.80 (-0.57%) $-1.90
NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$117.04 (-0.86%) $-1.02
Under Armour, Inc. Stock Quote
Under Armour, Inc.
UA
$9.01 (-2.49%) $0.23
Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$12.94 (-5.48%) $0.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
402%
 
S&P 500 Returns
129%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.