Cramer Gets Fit With Life Time Fitness (LTM)

On tonight’s MAD MONEY show on CNBC, Cramer said he is expecting a rate cut rather than that tightening bias after the MAY FOMC meeting.  He is reviewing ways to make money off of America needing to lose weight.

On weight loss, Cramer said there are ways to profit off of the weight loss fad after the holidays.  He wants to get into the weight loss game before the companies report Q1 results.  You can burn calories or cut down calories.  There are some that earn major bucks and some to avoid.

As far as a health club play, Cramer likes Lifetime Fitness (LTM-NYSE).  Their revenues grew 30% in 2006.  There is a fragmented market in fitness centers.  The over 55 year olds make up over 20% of gym attendance now.  Most clubs don’t work that well for weight loss.  Town Sports Int’l (CLUB) is the second one but LTM beats it on almost all metrics he cares about.  LTM brings in bigger revenues per member and it isn’t expensive.  LTM has a better fitness model with larger clubs and more growth on the map in the South and Mid-west.  An analyst from Prudential recently gave it an Underweight rating, but Cramer thinks it should have been an overweight rating.  Cramer said the call was not right.  LTM rose 0.9% to $54.20 in normal trading but it popped 1.4% to $54.97 after Cramer touted it after-hours.

Jon C. Ogg
January 31, 2007