r/investing
Bought $PLNT, $AVGO, $PODD. Thoughts?
Bought PLNT, AVGO, PODD as contrarian plays on fundamentally sound companies oversold due to temporary issues.
- Planet Fitness has a stable franchise model and management is correcting marketing missteps despite the stock drop.
- Broadcom maintains strong revenue targets and key AI contracts, with the sell-off driven by missed speculative expectations rather than fundamentals.
- Insulet continues to post revenue growth despite device defects and GLP-1 competition, suggesting resilience.
- Planet Fitness faces macro headwinds from decreasing disposable income for its core demographic.
- Broadcom's exposure to the AI sector carries risk if the AI boom falters or demand slows.
- Insulet faces significant execution risk regarding device defects and long-term threat from GLP-1 weight loss drugs.
Hi,
The Core Idea
All three of these companies (Planet Fitness, Broadcom and Insulet) are fundamentally sound companies caught in a company specific storm. They got strong earnings growth, healthy margins, and clean balance sheets. The reason for the sell of is valid but in all cases the punishment seems disproportionate to the actual damage done.
$PLNT down 55% from ATH due to a failure in their marketing as admitted by their management during the earnings call. Essentially, they alienated their core audience and drifted away from their core message. As a result, new sign-ups slowed and management paused their price hike. This being said the core franchise model still works, royalty streams are stable and management are actively course correcting. However, I do see a major risk related to the macro economy and decreasing disposable income for the core demographic, however, I'm optimistic it will normalise in the long run.
$AVGO is down 22% from it's ATH because management held their revenue target (still exceptionally good). Also a miss in the software segment (the higher margin segment) resulting in margin compression (slight decrease). This being said the 22% drop is entirely to do with the fact that the company hasn't hit the exceptionally high standards of speculators. Outside of that they got contracts with all the major AI companies and is on track to grow significantly. My biggest concern with this stock is that it's benefiting significantly from the AI boom which could potentially go bust but again I am optimistic about the AI sector and it's adoption.
$PODD is down dover 50% YTD. This stock in my opinion is the riskiest because it hedges on the hope that management is able to control the defects of their devices which caused the sell off in the first place. Additionally, the overall market has been adversely affected by the rise of GLP-1s. Despite the defects, adverse incidents and rise of GLP-1s this company has posted higher revenue and management stated there was a increase in new patient starts in March, signalling trust and demand.
I am considering $PGY on a similar analysis.
Please share your thoughts on my thesis, I know it's quite contrarian, that's the style I prefer to invest but I am aware I could be wrong so your insight is valued.
Also share any other tickers with a similar set up! Would love to research them.
"Additionally, the overall market has been adversely affected by the rise of GLP-1s." The underground fitness community buys the shit out of GLP-1's for enhanced results on the grey market.
I'm curious - how are GLP-1s used as performance enhancers?
I thought it was just an appetite suppressant
Seriously?
I think you're the kind of guy who prefers to work out in a judgement free zone and doesn't train legs.
PODD is donezo. i owned it at 300 but a friend that works as a PM at hedge fund told me to get out. best decision i ever made
Did he say why?
honestly dont remember, something about medtronic
Why put a dollar sign at beginning of each ticker?
AVGO seems reasonable after the dip to hold long term, but personally MU made more sense after Friday dip from almost 1100 to me bc it fell 20% without anything directly going bad in the business, more so as a cascade effect of AVGO and other macros, and has a lot of momentum now ahead of earnings. Went up 10% today so it happened to be right, but you could easily imagine a parallel universe where the stock would behave differently under the same conditions. AI sales were 16B vs expected \~18 which one has to ask themselves is a temporary miss or perhaps objectively better to bet on other businesses you think you can approximate better.
Planet Fitness has been known as a place to get a shower and shave for the homeless or those living in cars and campers. It was a good value proposition for people with jobs and income that can't afford housing.
Today, their competition is Crunch Fitness.
I've been at the YMCA for almost 40 years but had a Planet Fitness for a while when I wanted to workout late at night but eventually dropped it. Good business model but there's competition.
$PLNT The writing was on the wall when they blasted out with their lifetime membership for a very low price. Same as 24 Hour Fitness did. All it did was attract the homeless for shower privileges and killed the company. Who wants to work out in an homeless encampment. 24 Hour is dead now too
they both took the money and ran!
When did they offer lifetime memberships?
24 hour? was through Costco, about 10-15 yrs ago. Destroyed them all
Planet Fitness has been running those CHEAP specials for a while now trying to get their accounts receivable up to project a better financial picture, but it was clearly going to nite them in the ass ... and it did.
you ever been to either? Homeless are even doing their laundry in the sinks, and there is no way to stop "members' from using the club theyve joined
I have a membership to planet fitness. The one I go to is pretty decent, but I’m sure there are some run-down ones.