Where to Buy Gym Stocks and How to Start

Investing in the fitness and gym industry offers a way to participate in the growing health and wellness sector. This broad category encompasses a range of companies that cater to physical activity and healthy lifestyles. Understanding the different segments within this industry can help individuals identify potential investment opportunities.

Identifying Gym-Related Companies

The fitness industry includes various publicly traded companies that extend beyond traditional gym chains. These can be categorized into several distinct segments for potential investors to consider.

Physical gym chains and fitness centers form one segment, with examples such as Planet Fitness Inc. (PLNT), known for its low-cost membership model, and Life Time Group Holdings, Inc. (LTH), which operates high-end athletic resorts. Xponential Fitness Inc. (XPOF) also represents the boutique fitness studio operator category.

Fitness equipment manufacturers constitute another important category, producing gear for both commercial gyms and home use. Publicly traded companies in this space include Nautilus, Inc. (NLS), recognized for brands like Bowflex, and Peloton Interactive (PTON), which offers connected fitness equipment.

Another segment involves fitness technology and applications. The Beachbody Company, Inc. (BODI), for instance, provides a digital-first health and fitness platform with structured workouts and nutrition plans. Athletic apparel and accessories companies, such as Lululemon Athletica Inc. (LULU), Nike, Inc. (NKE), Under Armour, Inc. (UA), and Skechers USA Inc. (SKX), also represent a significant part of the broader fitness ecosystem. These companies design and market clothing, footwear, and accessories for physical activity.

Researching Potential Investments

Before committing to an investment, thorough research into a company’s financial health and market position is a necessary step. Investors typically examine various financial metrics to assess a company’s performance and valuation. Key metrics include revenue growth, which indicates a company’s ability to increase sales, and profitability measures like earnings per share (EPS), which show how much profit a company generates per outstanding share.

Other important financial indicators include the price-to-earnings (P/E) ratio, comparing a company’s stock price to its earnings, and the price-to-book (P/B) ratio, which contrasts market value with net asset value. Debt levels, such as the debt-to-equity ratio, offer insight into how much a company relies on borrowed funds, while free cash flow reflects the cash generated from its operations. These metrics help in understanding a company’s financial stability and growth prospects.

Beyond financial figures, investors also consider broader industry and company-specific factors. This includes analyzing market trends, evaluating the competitive landscape, and assessing the quality and experience of the management team. Brand strength and a company’s capacity for innovation are also important aspects to investigate. For publicly traded companies, essential resources for this research include annual and quarterly reports filed with the U.S. Securities and Exchange Commission (SEC), which provide detailed financial statements and management discussions. These filings are available through the SEC’s EDGAR database.

The Investment Process

Once a specific company has been identified and thoroughly researched, the next step involves the procedural aspects of purchasing its stock. The initial action is to open a brokerage account, which can typically be done online with most financial institutions. This process requires providing personal information, such as your address, Social Security number or tax ID, and employment details.

After opening the account, it must be funded before any investments can be made. Common methods for funding include electronic funds transfers (EFT) directly from a bank account, wire transfers, or mailing a check. Some brokerage firms also allow direct deposit or transferring an existing account from another financial institution.

With funds available, placing a stock trade involves navigating the brokerage firm’s online platform. Investors generally choose between a market order and a limit order. A market order instructs the broker to buy or sell shares immediately at the best available current price, guaranteeing execution but not a specific price.

Conversely, a limit order allows an investor to specify a maximum price they are willing to pay when buying, or a minimum price when selling, ensuring price control but not guaranteeing that the trade will execute if the desired price is not met. Transaction costs, such as commissions, have become less common for online stock and ETF trades, with many brokers offering $0 commission. After a trade is executed, investors can monitor their investment performance directly within their brokerage account interface.