The global fitness and health industry is set to boom in the years ahead, so I’ve been hunting for stocks to buy in this area lately. I wanted innovative companies led by founders that were growing fast globally and profitable.
Interested to know which two I bought for my ISA and feel are worth considering? Read on.
Swiss engineering
On Holding (NYSE:ONON) is the Swiss company behind the premium running shoe brand. I was sceptical about this stock because I’ve seen other athleisure brands go from market darlings to serial underperformers.
Think Under Armour and Lululemon. They’re down 74% and 57%, respectively, in five years as they succumbed to competitive pressures and growth evaporated.
Competition is a key risk for On too. New challengers could emerge and grow fast, threatening the brand’s staying power. Fashion can be very fickle.
So, why this one? Well, after digging in, it became clear that On is like an engineering firm that happens to make trainers. It goes to incredible lengths with its performance-focused design, and its patented CloudTec cushioning system sets it apart in a crowded market.
Plus, its LightSpray technology involves robots making/adding a new upper for a super-trainer in just three minutes. No stitching nor massive assembly lines. On just opened its second automated shoe facility, in South Korea, adding another 32 robots.
The founder-led company plans to bring robot-spraying factories to other continents too. This could slash shipping times, reduce logistics costs, and navigate tariffs.
LightSpray is a pinnacle example of how On continues to innovate through Swiss Engineering, dramatically changing the way we can create high-performance shoes with unmatched efficiency, sustainability, and performance results.
Co-founder Caspar Coppetti.
In 2026, the company expects net sales to increase at least 23% on a constant currency basis. Considering the consumer backdrop, that would be impressive.
Meanwhile, profit margins are strong, boosted by premium prices. Its new LightSpray Cloudmonster 3 Hyper trainers, which are made for serious runners, cost £270 a pair!
Finally, the valuation looks very reasonable, with a forward price-to-earnings (P/E) ratio of 24. That’s not expensive for a high-margin disruptive growth company.
UK stock
Now for the FTSE 250 with Applied Nutrition (LSE:APN). The UK sports nutrition brand sells over 120 different products, including protein powder, high-performance hydration drinks, and various supplements.
In the six months to 31 January, revenue soared 56.5% to £74.5m and adjusted EBITDA jumped 55.8% to £21.5m. There was solid growth across Europe, Latin America and Asia, while a factory extension will increase revenue capability to £300m (up from £107m last year).
Rising inflation is a risk to near-term growth, both in terms of sales to consumers and costs for raw ingredients. Meanwhile, the Iran war is disrupting supplies to Middle East customers.
However, the long-term growth story looks attractive. It’s expanding shelf space with existing retailers, winning new customers, entering different markets (GLP-1-friendly ready meals with Morrisons, for example) and expanding overseas.
| Is it innovative? | Yes, and 85% of products are made in-house so it can quickly capitalise on new trends |
| Founder-led? | Yes, founder-CEO Thomas Ryder says it has “only scratched the surface” of what’s achievable |
| Profitable? | Strong 27.8% operating margin |
| Global opportunity? | The global market is huge and growing |
With a fairly modest forward P/E of 18, I reckon this growth stock deserves attention.
