Globesity: A new investment opportunity

Companies attempting to tackle the global obesity epidemic will become part of a much larger investment trend in the next 25 years or more.

According to a Bank of America Merrill Lynch Global Research report, “Globesity—The Global Fight Against Obesity,” there are more than 50 companies out there focused on pharmaceuticals and healthcare, food, commercial weight loss, diet management and nutrition and sports apparel and equipment that will dominate the stock markets in the near future.

“Global obesity is a mega-investment theme for the next 25 years and beyond. Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world,” said Sarbjit Nahal, equity strategist at BofA Merrill Lynch Global Research.

The research shows that 500 million people, globally, are obese and 1.4 billion are overweight. Obesity is the fifth-greatest cause of death, leading to 2.8 million fatalities a year. According to the World Health Organization, the number of obese people worldwide doubled between 1980 and 2008. By 2030. 65 million more Americans will be obese if current trends continue. Europe also has seen its number of obese people triple in 30 years.

The report showed that as of May 2012, according to the U.S. Institute of Medicine, the cost of obesity-related illnesses in the U.S. annually was more than $190 billion, or 21 percent of annual medical spending.

“Investors should take a long term view and a broad perspective in selecting stocks as part of the globesity theme,” said BofA Merrill Lynch.

Included in its companies to watch were those that are taking advantage of the FDA’s increased support for obesity drug development and those tackling related medical conditions, like diabetes, kidney failure, hip and knee implants. There is a major push toward health and wellness food options, those that reduce fat and sugar contents. Commercial weight loss, diet management and nutrition businesses also are on the radar, with up to 50 percent of some western populations dieting. The company also believes that sports apparel and equipment will only continue to grow as governments get into the act promoting physical activity.


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