Health & Wellness

Health & Wellness: A Post-Pandemic Opportunity

The COVID-19 pandemic has brought health and wellness to the forefront and has un-
derscored the significance of healthy lifestyles and mental wellbeing. Following pandem-
ic-related lockdowns, stocks that help consumers pursue a healthy lifestyle have seen

good traction, and increased focus on ESG investing has provided another catalyst.
Some long-term drivers that are working in favor of these stocks are:

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 gained 0.09% last week after a strong rebound in the prior week. The index is trading at an all-time high and is in a Confirmed Uptrend.
  • Of the 17 indices we cover, eight are in a Confirmed Uptrend and nine in an Uptrend Under Pressure. Last week, we upgraded Luxembourg to a Confirmed Uptrend. The average distribution day count remains elevated at 6.47.
  • Our rotation chart continues to highlight improving momentum among Health Care and Technology sectors. Retail, which has outperformed over the long term, is now showing signs of weakness in the short term.
  • Last week, we removed BHG Group (BHG.SE) from our Focus List. Actionable names in the Focus List include Trigano (TRI.FR), Soitec (SOI.FR), Zooplus (ZO1X.DE), Halma (HLMA.GB), Nibe Industrier (NIBE.SE), Schneider Electric (QT@F.FR), and Teleperformance (ROFR.FR).

O’Neil Consumer/Retail Weekly

Developed Markets
Lululemon (LULU; $50.38B marketcap): We added Lululemon to our U.S. Focus List (after removing it in March)
after the stock broke out of a 30-week-long cup-with-handle base. The company’s earnings growth profile largely
depends on the success of its “Power of Three” five-year plan. The plan, introduced in 2019, focuses on product
innovation, ecommerce, and market expansion. Recent acquisition of Mirror will help the company expand its TAM.
Consensus expects 46% growth next quarter. Overall growth in FY22 (ending January 22) should be a stellar 34%,
the highest since 2014, helped by favorable comparables

Radico Khaitan

What’s happened? Emerging Focus List constituent Radico Khaitan reported
mixed Q1results. Net revenue from operations grew 47.3% y/y, while basic EPS
rose 35.7% y/y. We recommend that investors hold on to the stock and add to
the positions if it traces

Deckers

What’s happened? Deckers reported excellent Q1 FY22 results yesterday after
market close. Revenue was ahead of consensus by a solid 23.8%, and EPS was at
$1.71, compared to consensus ($0.05). Deckers had an exceptional start to
FY22, leading to a rise in guidance. The stock is extended from an ideal buy
point. We recommend that investors hold positions and accumulate when the
stock pulls back to its 21-DMA.

Prada

What’s happened? Prada reported H1 FY21 results yesterday after market
close. Revenue and operating profit beat estimates by 4% and 22%,
respectively. The solid results confirmed that Prada’s turnaround is on the right
track. The stock is up more than 13% and retook its key moving averages on
strong volume. We recommend that investors add to positions here.

De Longhi

What’s happened? De Longhi reported Q2 FY21 results during market hours
yesterday. The stock gained 1.9% yesterday as revenue beat estimates by 12%
and EBITDA was 21% ahead of estimates. We would recommend investors to
hold positions as the stock is currently forming the right side of a flat base with
resistance at €40. We would wait for the stock to break above its resistance on
strong volume before adding positions.

Beneteau

Key points from this report:

 

  • Buy. Shares are breaking out of a double bottom after a beat-and-raise first half. The strong order book (+55%) brings excellent visibility for the upcoming quarters as demand remains well oriented. Management raised its FY21 guidance and expects operating profit to grow more than 100%, versus 90% previously.