The world is expanding, but unfortunately it's not the global economy whose waistline needs to go up a size.
The rate of worldwide obesity has been marching higher at an extraordinary rate for more than three decades now. According to the Organisation for Economic Co-operation and Development, known as the OECD, fewer than one in 10 people were considered obese in 1980. As of 2011, 19 of the 34 OECD countries have a majority of their population that's either overweight (defined as a body mass index above 25) or obese (a BMI of more than 30).
A growing problem
The reason for higher obesity rates is pretty simple among the world's economic powerhouses: living conditions, education, and incomes have been improving. Certainly the diverse eating habits of different cultures has some bearing on this as well, but the trend has been unmistakably higher across all OECD countries.
As of the OECD's most recent data available, here are the nine most obese countries in the world:
Source: OECD health data 2011. Obesity rate in adults.
The concern with obesity is that it puts people at higher risk of developing certain cardiovascular diseases, diabetes, and even certain types of cancer. Even more than that, it can affect those around you vis-a-vis health care costs. Obesity-related costs are responsible for 1%-3% of all health expenditures in most countries, with that figure jumping to somewhere in the 5%-10% range for the U.S. which tops the list of most obese nations. Furthermore, if you add in the lost production caused by obesity-related ailments on top of these health care costs, obesity costs are more than 1% of the total U.S. GDP!
These nine countries and their inhabitants really have two choices: be proactive or reactive.
The proactive response
Being proactive is the simple act of people making a conscientious choice to live a healthier lifestyle. This approach is accomplished by exercising on a regular basis and eating more nutritious foods, as well as by government agencies encouraging healthier lifestyles for its citizens.
You might think that gyms would offer an interesting investment opportunity in a situation like this, but customer loyalty is historically very poor. The smart way to play a proactive lifestyle change from an investment perspective is to target organic and natural food companies. Whole Foods Market (NASDAQ: WFM ) , for instance, has built its success upon offering locally grown natural and organic foods to consumers. Although organic foods cost more than what you'd find at your traditional grocery store, they are often more nutritious. You'll also find that consumers are more than willing to pay more for food if they know it's better for them.
But, it isn't just grocers that are making the difference. Fresh-Mex chain Chipotle Mexican Grill (NYSE: CMG ) offers a full line of meats that are free of antibiotics and synthetic hormones under its Food with Integrity pledge. It's another way of supporting local farmers and a big move toward encouraging healthier eating habits among its consumers.
The reactive response
Understandably, proper diet and exercise will not work for everyone. You can blame it on genetics if you'd like, but the reactive response is where medication approved by the Food and Drug Administration steps in.
Over the past year, we've had two new potential chronic weight management drugs approved by the FDA: Qsymia by VIVUS (NASDAQ: VVUS ) and Belviq by Arena Pharmaceuticals (NASDAQ: ARNA ) . Keep in mind that these aren't wonder drugs, but they did show significant promise in trials. Belviq, for example, induced weight-loss in excess of 5% in 38% of patients during trials while also providing better glycemic balance in patients with type 2 diabetes. VIVUS' Qsymia delivered comparatively intriguing results with 62% of recommended dosage patients losing at least 5% of their body weight in trials.
Unfortunately, chronic weight management drugs aren't magic pills. Qsymia has quite a few restrictions attached to it, including recommendations by the FDA not to use it if you're pregnant or if you've had a recent history of unstable heart disease. Similarly, Belviq isn't recommended for those who are pregnant and should be closely monitored in patients with congestive heart failure. These concerns were enough to keep Qsymia (known as Qsiva in Europe) and Belviq from being approved by the European Medicines Agency (essentially the FDA of the EU) because of unique safety concerns attached with each drug.
However, there still exists plenty of promise within the U.S. and abroad for both drugs -- if they can harness that potential, that is! Arena, I've long thought, has a one-up on VIVUS in that it's chosen to partner with pharmaceutical giant Eisai Pharmaceuticals to handle its marketing and distribution, whereas VIVUS is going it alone. Eisai's experience could be the factor that makes Belviq the better selling anti-obesity drug.
Arena and Eisai's collaborative deal covers most of North and South America, including the U.S., Mexico, and Canada -- the first, second, and sixth most-obese nations -- according to the OECD. Arena also has a marketing and distribution partnership in place in South Korea with Ildong Pharmaceuticals. However, South Korea is the least obese country of all, coming in at just 3.8% of the population, so that partnership is far less important than its tie-ins with Eisai.
Another name worth keeping an eye on here is Orexigen Pharmaceuticals (NASDAQ: OREX ) , which is in the process of developing its own chronic weight management drug known as Contrave. The drug was rejected in 2011 because of long-term cardiovascular concerns, but Orexigen has run extended safety trials and could resubmit its new drug application before the year is out.
The battle against obesity rages on
With Qsymia only recently becoming available in the U.S. and with Belviq still awaiting final labeling from the U.S. Drug Enforcement Agency before it can find its way onto pharmacy shelves, the reactive side of the business really hasn't had much chance to shine. Hopefully, within the next three to five years we'll see the start of a decline in nationwide obesity trends among these nine most-obese countries; but it'll also take a conscientious effort by the people living there to lead healthier lives. I do feel there's ample hope down the road for a slimmer global population and plenty of potential for fatter stock prices for some of the companies mentioned here.
As the United States continues to change it's approach to healthcare, obesity is sure to maintain its status as a high profile topic. What other high profile health topic was Warren Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Find out in our free report: What's Really Eating At America's Competitiveness. You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.
Bradley C. Bower/Bloomberg/Getty Images Your modem router's loyalty may be conflicted. In a move that is either beautifully brilliant or brazenly boneheaded, Comcast (CMCSK) is turning leased residential routers into Wi-Fi hotspots that are accessible to nearby Xfinity customers. 
Alamy Late last month, Chinese hardware giant Lenovo (LNVGY) was the subject of many headlines -- not all of them complimentary -- when it signed a high-profile deal to buy the Motorola Mobility smartphone unit from Google (GOOG). The Asian firm is ponying up a cool $2.9 billion to acquire the business, which is monstrously unprofitable to the tune of a $645 million operating loss in the first nine months of 2013. The market didn't appreciate this. Disturbed by the idea of gallons of red ink spilling from Motorola Mobility onto Lenovo's results, investors traded down the firm's stock by as much as 14 percent after the deal was made public. This might have been compounded by the firm's previous announcement, made only days earlier, that it was spending $2.3 billion to purchase IBM's (IBM) x86 -- read: lower-end -- line of servers. Was such a sell-off, in reaction to either or both, justified? At Home Abroad Lenovo is one of those companies that likes to expand by acquisition. Few Westerners had ever heard of the IT manufacturer in 2005 when it closed its first big buy -- the personal computing division of IBM, for total consideration of around $1.75 billion. The purchase seemed a counterintuitive move when everyone knew that a future stuffed with wireless Internet and portable computing was just around the corner. But guess what? Lenovo not only sold plenty of notebooks and desktops, it managed to grow into the top PC manufacturer in the world. According to figures from Gartner (IT), in Q4 2013 the company was the clear market leader in terms of PC vendor unit shipments. It moved nearly 15 million PCs during the quarter, a figure 6.6 percent higher than in the same period the previous year. This was particularly impressive considering that total shipments for the industry dropped by almost 7 percent over that time frame. Lenovo was able to do this because, for most of its life, it's made big strides in less affluent markets and is continuing to do so. In its most recent quarter, for example, it hit the double digits in Latin America PC market share for the first time in its history. In another first, it climbed to the No. 1 position in big, populous Brazil. Meanwhile, in the Europe/Middle East/Africa region, much of which is populated by emerging economies, Lenovo notched its highest-ever market share. This came in at just under 15 percent, with the company's PC volume up 17 percent on a year-over-year basis. Considering those results, it was a natural next step for the company to advance up the PC food chain to cheap servers. After all, if various up-and-coming markets are still hungry for computers, it follows that they'll also eventually need the servers delivering local websites. But sooner or later, the computer market is inevitably going to dry up in those parts of the world too. And the company is very well aware of this. Hence its new push into the smartphone space. Calling on New Markets As with computers, which Lenovo was selling (largely to the Chinese market) long before the IBM buy, the company has been an active cellphone manufacturer for years. And, as with everything it does, it's put a lot of effort and capital into clawing out market share. In 2012, the company broke ground on a nearly $800 million research/production factory in the Chinese city of Wuhan that can produce 30 million to 40 million smartphones a year. The timing wasn't accidental: 2012 was the year the company began selling handsets outside of China. Size is power, and over the next year Lenovo vaulted into the top three in terms of global vendor sales, climbing over Asian rivals Huawei and LG Electronics to get there. No. 3 ain't a bad place to be, and it's an accomplishment to advance that far. However, given the dominance of the two leads -- Samsung (SSNLF) and Apple (AAPL) -- it was a distant third; Lenovo had a market share of just over 5 percent, less than half of Apple's 12 percent and nowhere in sight of Samsung's commanding 32 percent. Lenovo is determined, and it wants to win. Absorbing Motorola Mobility buys it not only precious percentage points of market share, it also brings it a host of patents along with the fresh technology it'll need to make handsets that can compete with iPhones and Galaxys. Product Shift Shelling out a few billion dollars for its shiny new asset is only the beginning for Lenovo. It's going to have to fight hard to increase that market share, and even harder to break through the Samsung/Apple duopoly. There's a sense of urgency here; its shipments of computers will eventually fall, as they have for the company's main competitors. And they're still too heavy an ingredient in the Lenovo product mix, being responsible for nearly 80 percent of revenue in the most recent quarter (breaking it down, the split was roughly two-thirds notebooks to one-third desktop PCs). But if an investor were to gamble today on Lenovo's chances, the bet would be a rather good one. The company is scrappy, determined, and has proven that it can gain market share in crowded segments and maintain its position. We shouldn't be surprised if it repeats this feat with smartphones.
Getty Images Extended warranties are everywhere. It seems like every retailer is offering them now, even for purchases as small as a $30 toaster oven. And according to research done by Protect Your Bubble, a third-party gadget insurer, 40 percent of U.S. buyers are taking those stores up on the offers. Sales of extended warranties have seen between 15 percent and 20 percent annual growth over the past 3 years. And there's good reason for retailers to push them: Extended warranties are mostly just a high-margin upsell for the companies that provide them. And in almost every case, they are a bad deal for consumers. Why Extended Warranties Get Such a Bad Rap Extended warranties are a form of insurance -- which makes them, at bottom, nothing more than a bet against "the house." "Insurance companies [and extended warranties] only make money if the company collects more money than it pays out," says Professor Bruce Clark of Northeastern University's D'Amore-McKim School of Business. Companies that offer insurance and extended warranties have teams of actuaries who calculate the odds that a consumer will file a claim. And the odds aren't in our favor. It's this entirely accurate impression that we're gambling in a rigged game to buy them that gives extended warranties their bad rap. It's hard to visualize the benefits until you use any form of insurance, and even when you have it, you hope to never need to use it. A Good Buy for Klutzy People Whether or not you should consider extended warranties might be better based on the type of person you are than the types of products you're buying. Are you klutzy? Prone to breaking things? Do you have unusual usage habits for your gear? Then extended warranties may actually be a good fit for you. "A friend of mine bought smartphones for himself and his teenage son, but he only bought the insurance for his son," says Clark. Think about it in the context of your car, for example, he suggests. "If you are an unusually heavy user, for example, driving twice as much as the average person, then an extended warranty based on time [not miles] may make sense." Most of us aren't klutzes, and the way we use our technology is fairly close to the norm. That makes us the type of consumers companies want to sell extended warranties, to because we're unlikely to make claims. When Even You Should Buy a Warranty While it doesn't make financial sense to buy an extended warranty or insurance on a $30 toaster, are there other purchases where it is actually a good idea? "We advise consumers to consider: 'What would my life be like not having this device and what would the cost if I wanted to replace that particular unit be?' " says Stephen Ebbett, president of ProtectYourBubble.com. "So if your TV was to break outside of the manufacturer's warranty, that could be a $3,000 bill or more." Ebbett also recommended that consumers think about what it would be like to be without a critical item or gadget in their life. For example, if you were to loose or break your smartphone, what would that be like? The obvious items that you may want to buy an extended warranty for are laptops, smart phones, and tablets. You may also want to consider an extended warranty for an expensive camera like a digital SLR. How to Avoid Falling for the Extended Warranty Trap One of the best moves you can make is to say "no" at the register when a cashier offers you an extended warranty. But there are a few things you can do if you're nervous about an item breaking. First, review the existing manufacturer's warranty. You may be able to file most claims directly through the manufacturer if you have any issues with an item. It pays to understand the coverage that comes with most products -- its limits, exclusions, and when the coverage expires. Manufacturer's warranties cover most repairs that you might need. You should also understand that many manufacturers' warranties cover you through the expected useful life of that item. If it breaks, that's most likely an indication that the product wasn't built to last much longer anyway, and you simply need a new one. "Just about all manufacturers warranty their purchases for a certain length of time (most do so for the first year) and many credit cards will extend that warranty. In some cases, they double it," says David Bakke, writer from the popular blog Money Crashers. "A few instances where it might make sense to purchase an extended warranty are for used automobiles and older homes. For all other purchases, invest in a quality brand name and you also lessen the chance that your item will break down." If you feel like you to buy an extended warranty, shop around for the best deals. Don't get trapped in thinking that you have to buy the warranty where you buy the gadget. You may find a better deal -- more coverage, fewer restrictions, faster returns, and better service -- from a third-party insurer. Consider Self-Insuring Your Purchases You can also consider self-insuring your purchase. If you are worried about how you'd pay to repair or replace a specific broken item, each month, set aside a small fraction of its cost in a savings account. That will give you a fair amount of assurance that you when it comes time to replace it, you'll be in a good position to do so. And you never need to worry about having wasted your money if it outlasts your self-warranty. For example, if you're buying a brand new refrigerator, look up the expected life span of that model online. Typically, people need to replace refrigerators every 10 years. So, if a refrigerator costs $2,000 and you are worried about it breaking, set aside $17 a month. And, in 10 years, you'll have enough saved for a new one. Of course, this is a simplistic example, but it gives you an idea of how to think of self-insuring your purchases instead of buying an extended warranty for them. Most consumers should skip extended warranties almost all the time. Even when they seem relatively cheap, they're rarely worth the money, because the odds are you won't use them.
) with a “Buy” rating due to CMI’s growth prospects related to demanding emissions standards. CMI was given a price target of $158, which suggests an upside of 22% to the stock’s current price. CMI has a yield of 1.92%.