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How To Profit From The Obesity Epidemic

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A recent report by Bank of America focused on investment themes for a changing world. One of the areas that the report identified as a source of change is the growing obesity epidemic.

This problem is not just an American problem, and Bank of America analysts use the term “globesity” to refer to the worldwide obesity issue. The number of overweight or obese people in the word has tripled since 1980, and nearly a third of the world’s population is now overweight. Analysts predict that nearly half of the world will be overweight or obese by 2030.

Obesity-related conditions account for more than 3.4 million adult deaths per year. The report states that lifetime health-care costs for obese people are about 40 percent higher than for normal-weight patients. The cost of globesity is estimated at 2.8 percent of global GDP, and the recent spike in childhood obesity and obesity in emerging market countries is a bad sign for the future.

Analysts see four potential ways to invest in the fight against globesity:

  1. Pharmaceuticals, healthcare, and medical technology
  2. Health food and nutrition
  3. Weight loss and diet programs
  4. Fitness apparel and equipment

The stocks that Bank of America recommends as a means to capitalize on the opportunities that will be created by the globesity problem include the following:

  • Repros Therepeutics Inc (NASDAQ: RPRX), developer of low testosterone treatment drug Androxal
  • Orexigen Therapeutics, Inc. (NASDAQ: OREX), developer of anti-obesity drug NB32
  • Tandem Diabetes Care Inc (NASDAQ: TNDM), designer of insulin pump technology
  • Kerry Group (OTC: KRYAY), a top producer of food ingredients and flavors
  • Novo Nordisk A/S (NYSE: NVO), a top developer of insulin and diabetes care technology
  • WhiteWave Foods Co (NYSE: WWAV), producer of organic and plant-based dairy products
  • Dicks Sporting Goods Inc (NYSE: DKS), a leading fitness equipment and apparel retailer
  • St. Jude Medical, Inc. (NYSE: STJ), developer of cardiovascular medical devices

According to the report, the economic impact of globesity is $2 trillion, similar to the financial impacts of smoking, armed violence, war and terrorism. Bank of America believes that smart investors can be well-positioned to benefit from the new world war against obesity.

Latest Ratings for RPRX

Nov 2016Ladenburg ThalmannUpgradesNeutralBuy
Dec 2015Brean CapitalTerminatesBuy
Oct 2015Bank of AmericaDowngradesNeutralUnderperform

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Posted-In: Analyst Color Long Ideas Guidance Global Analyst Ratings Trading Ideas


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