Below is the latest insights offered by Jeff Ross at his column over at Seeking Alpha. Click here to view the full article .
Summary
- Based in the US, Medifast Inc is an alpha-generating, health and wellness “diamond in the rough” with a $1.9 billion market cap.
- Investors who have been astute enough to have held MED shares over the past three years have experienced some volatility, to be sure, but they have also been handsomely rewarded.
- Medifast’s astonishing metrics are even more impressive when we consider that the company, though nearly 40-years old, is still early in its growth phase.
- MED is quite likely to outperform the S&P 500 over the next 3, 5, and 10 years.
As a hedge fund manager, physician, and all-around fan of healthy living, I am well aware of the enormous investment potential in the United States’ $194 billion health and wellness market. In addition, the US weight-loss market is alone worth $17 billion; which is not surprising given that approximately seven in 10 Americans are currently overweight or obese.
Innovative companies that put clients and patients first via a “people-helping-people” business model can improve our world’s future health and quality of life. Owning shares of such companies is a way you and I can invest with a positive future impact, while generating meaningful investment returns along the way.
Impact Investing in the Health and Wellness Sector
Based in the US, Medifast Inc (MED) is an alpha-generating, health and wellness “diamond in the rough” with a $1.9 billion market cap.
Based in Baltimore and founded in 1980, the mission of Medifast is “to offer the world lifelong transformation one healthy habit at a time.” Medifast does so by manufacturing and distributing “clinically proven” healthy living products and programs in conjunction with over 24,000 integrated coaches, community support, and clinical studies.
Through positive personal experiences, consumers and clients of Medifast’s products and services often become Medifast “active earning coaches,” allowing for a greater network effect, relatively low marketing costs, and higher profit margins.
Unlike the more dubious wholesale model of sales, the Medifast model is commission-based, relying on product sales driven by an integrated coaching service. This means that coaches do not actually handle any retail products or cash for their clients, nor do they pay upfront to stockpile products at their own expense to benefit the parent company.