Analysts: Obesity fight can turn a profit

July 17, 2012

(Keepon | Flickr) Though bananas can help fight obesity, weak prices could make it tougher for Dole stock to thrive.

There are 500 million obese individuals across the world, a number that global health organizations are desperately trying to lower. But where public health workers see crisis, Bank of America sees an investment opportunity. On Monday, BofA analysts released a list of 50 stocks for "investors wishing to play the global fight against obesity theme."

The 50 investment opportunities fall into four broad categories: pharmaceuticals and health care, food, commercial weight loss and sportswear. What the investments all have in common is a potential to gain from efforts to cut down global obesity rates.

The biggest winners in the health-care group, the analysts note, could be the medical device companies. They "are playing an increasingly important role in dealing with the impact of obesity-related co-morbidities, including heart disease and failure, type 2 diabetes, kidney failure, respiratory complications (e.g. obstructive sleep apnea), osteoarthritis and incontinence."

Not every health-related company is positioned for success in the obesity battle; other factors could intervene. As the world's largest fruit producer, Dole ranks as "highly exposed" as a player in fight against global obesity fight. Analysts caution, however, that weak banana prices - there's an oversupply in Latin America, apparently - could cause it to underperform in coming months.

The outlook looks stronger for sports-related stores such as Foot Locker, which analysts called- "a play on fighting obesity via its strong market position as a footwear and apparel retailer." Fueled by international sporting events that could boost sales, such as Olympics and Euro 2012 soccer, and by the notion that "people increasingly want to be fashionable when doing sport," that type of retail business looks to be on the upswing.

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Suzy Khimm · July 17, 2012