Life Time Fitness: A Healthy Long-Term Investment

Jan.25.07 | About: Life Time (LTM)

Life Time Fitness, Inc. (NYSE:LTM) operates sports and athletic, professional fitness, family recreation and resort/spa centers under the LIFE TIME FITNESS brand. The Company designs and develops its own centers, and it focuses on providing its members and customers with products and services in the areas of exercise, education and nutrition. In addition to traditional health club offerings, most of its centers include an selection of amenities and services, such as indoor swimming pools with water slides, basketball and racquet courts, interactive and entertaining child centers, full-service spas and dining services and, in many cases, climbing walls and outdoor swimming pools. As of March 1, 2006, the Company operated 48 centers primarily in residential locations across nine states.

FUNDAMENTALS: Life Time Fitness is really a company that didn't begin to hit its stride until 2003 when it posted earnings of .72/share versus just .02 in 2002. While growth hasn't been any near those levels, this is a company that consistently posts earnings and sales growth of 20-30% which is expected to continue. Net margins isn't outstanding but in an industry with low margins it's impressive. Return on Equity is very good at 15% and management owns a good portion of the company (17%). All in all, this is a well run company that should continue to do well as people continue to become more health conscious . The company reports earnings on February 15th.

TECHNICAL: The technical picture remains outstanding. The stock has trended along the 200 day moving average since its IPO in 2004 and is currently breaking out of a base to a new all time high with very good volume indicating institutions are still initiating positions.

SELFINVESTORS RATING: With a total score of 52/60 (26/30 for fundamentals, 26/30 for technical), LTM is currently a top 10 Self Investors break out stock.

Full Disclosure: I currently don't hold a position in LTM but am considering a position in the next several days.

LTM 1-yr chart:

LTM 1-yr chart