The Healthy Way To Invest

From spas to organic shrimp, maintaining a healthy lifestyle by soothing the mind, spirit,
soul - and stomach - has added billions of dollars to the health and wellness industry's coffers. Yet, personal indulgences can also make for personal profits.

One way is to scour the stock market for such companies like Steiner Leisure (ticker: STNR), Whole Foods Market (WFMI), Wild Oats Markets (OATS), and Elizabeth Arden (RDEN) that cater to those looking for calm, balance, or plain old pampering in their busy lives.

In one example, the International Spa Association said in its latest study, there were approximately 136 million spa visits made in the U.S. in 2003, up from 95 million in 1999. The U.S. spa industry generated an estimated $11.2 billion in revenues in 2003 - more revenue than box office receipts that year, which turned in $9.49 billion, according to the National Association of Theatre Owners.

One stock that profits from so-called "experiential luxury" like massages and facials is Steiner Leisure, which operates spas for nearly 20 cruise lines and provides services for a number of hotels; it also runs massage and skin care training schools. Beauty products are sold through its spas, retailers and wholesalers, mail order, and the company's Web sites.

The company, headquartered in the Bahamas with a market capitalization of $758 million, has grown its earnings year over year and been disciplined about paying off debt.

Another stock that breathes escapism is Elizabeth Arden, the Miami Lakes, Florida-based owner and manufacturer of some 50 perfumes including Red Door and Sunflowers, not to mention the fragrance brands of pop-star Britney Spears.

Shares in Arden were downright ugly last year, when the stock was down 20 percent, but have since recovered, rallying up 8 percent year-to-date. In December, Arden launched Prevage, an anti-aging skin care product in department stores, which could have substantial potential, adding at least $50 million or 5 points to sales growth, some analysts believe.

But Prevage is not the only product flying off shelves. Natural and organic foods have seen phenomenal growth over the years. According to The Wall Street Journal, the U.S. organic-food market generated about $13.8 billion in sales in 2005, up from $11.9 billion in 2004 and $3.6 billion in 1997, quoting market-research firm Nutrition Business Journal. The firm estimates organics will reach $15.5 billion this year.

Two companies that have been hotter than hot tamales are Whole Foods Market and Wild Oats Markets, Inc. Whole Foods Market, the nation's largest retailer of natural foods, has been all the rage on Wall Street in recent years. While shares are trading over $72, or more than 40 times estimated 2006 profits, investors still love the stock because of its lifestyle appeal. Other grocers and retailers so love what Whole Foods stands for that they've even decided to copy it. Wal-Mart Stores (WMT) and other retailers have added organic foods in their stores. But it could be tough, as Whole Foods has legions of followers, as illustrated in the $10 billion company's profits and revenues. In its latest quarter, the company's profit grew 27 percent to $51.8 million, or 36 cents per share, on revenue of $1.31 billion. Wall Street had expected earnings of 35 cents per share. The retailer also reported that same-store sales grew 11.9 percent in the quarter, and boosted its forecast for 2006 same-store sales to a growth of 10-12 percent, from a prior estimate of 8-11 percent growth.

Wild Oats Markets, Inc., which owns the local chain Henry's, is no slouch, either. Wild Oats Markets has sown a loyal following by selling food that's good for shoppers and good for Mother Earth. The #3 natural foods supermarket chain in the U.S. in terms of sales (after Whole Foods and Trader Joe's), Wild Oats runs about 110 full-service stores in 24 states and British Columbia, Canada. Its stores provide natural, organic, and traditional grocery items, as well as environmentally-friendly household products. The stores operate under the Capers Community Market, Henry's Farmers Markets, Sun Harvest Farms (in Texas), and the Wild Oats Natural Marketplace names. It also has bakeries, coffee and juice bars, and massage therapists in most stores. The $544 million natural-foods retailer swung to a first-quarter profit, helped by higher sales, lower store-opening costs, and a shift to higher-margin products. But at around $19 and change, the Boulder, Colorado retailer might be a more compelling buy than Whole Foods; its price-earnings multiple is 36 times 2006 profits. Wild Oats operates 113 natural food stores in the United States and Canada.

All told, preserving and enriching your mind, body, and soul not only produces a healthier lifestyle, but also could fatten one's pocketbook - that is, if one shops diligently for the right kind of stocks. - Jennifer Valdez