I've been spending much of my time lately ignoring the recreational products group ($DJUSRP). And for good reason. This industry ranked 75th in performance out of 104 groups over the period February 19th through March 23rd - the period in which the S&P 500 fell from its intraday high to intraday low. On the three day bounce that followed, the DJUSRP managed to outperform the S&P 500 by a narrow margin, but still only ranked 63rd among its industry peers. It's clearly been a group that's out of favor on Wall Street.
However, there could be opportunities anywhere in the market and there could be one in particular in recreational products. Before I bring up the company, take a look at these recent changes in search results that were summarized by a top online marketing firm. They looked over a two week period at what Australians were searching for to see what types of "paradigm shifts" could be taking place. The thought process behind this is the marketing firm's belief that "intent"is the best predictor of behavior. Searches for "workout routines" and "home gyms" were up 92% and 81%, respectively. In other words, if people are bound to work at home and can no longer enjoy their normal exercise routine, they're looking for alternatives to stay fit.
Enter Peloton (PTON).
PTON offers connected fitness products that includes a touchscreen that streams LIVE and on demand classes. On the surface, that seems like a great alternative. The chart is suggesting that PTON is being accumulated as well:
The latest information shows that PTON already has 1.4 million members. This isn't a company that's changing gears to offer a product that could benefit from folks working at home. Their product is already in place and growing, and now the paradigm shift that is and will be taking place literally is falling into their lap.
There's also one unbelievable stat that suggests an even bigger lift in share price could occur and I'll be discussing that in Trading Places LIVE, my Monday through Thursday show that airs from 9:00am-9:30am EST on Mondays through Thursdays. Mondays and Wednesdays are held at EarningsBeats.com. There's no paid membership to join the show, although those joining the show will be added to our free 3x per week EB Digest newsletter, if you're not already a free member. If you'd like to join today's show and hear more about PTON and to get my latest thoughts on today's wicked futures (down nearly 900 points as I publish this) and where we might be heading, here's the link:
The room will be open from now through the end of the show, which typically wraps up at 9:30am, or just beyond.
Also, I'll be joining David Keller, Mary Ellen McGonagle and Grayson Roze later today on StockCharts TV's "The Pitch: 15 Stock Ideas In Uncertain Times". Here's the link for StockCharts TV. The show will begin at 12:30pm EST.
Happy trading!
Tom
