Face-Off on Stocks: Town Sports, Life Time Fitness, Weight Watchers [VIDEO]

It's no secret Americans need to eat less and exercise more. Two-thirds of the population is overweight and more than a third is obese, according to the Centers for Disease Control and Prevention. That sort of demographic heft bodes well for companies in the diet and exercise business, but it hardly means you should gorge on the stocks.

Town Sports (CLUB), Life Time Fitness (LTM) and Weight Watchers (WTW) are all approaching the cyclically sweet period between New Year's resolutions and swimsuit season -- but longer term macroeconomic concerns remain as serious as ever. After all, fitness club memberships and weight loss programs are discretionary expenses. That makes stubbornly high unemployment especially bad for business.

Town Sports, operator of New York Sports Club, Boston Sports Club and Philadelphia Sports Club, among others, has rallied 60% since mid-summer, making the valuation looked mighty stretched. On the other hand, shares in Life Time Fitness look compellingly cheap -- if analysts are right about the future course of consumer spending. Weight Watchers likewise looks like a cheap stock and enjoys relatively high margins compared with the fitness club companies.

But be forewarned: All three of these companies could have healthier balance sheets. For the bull and bear cases on Town Sports, Life Time Fitness and Weight Watchers, see Face-Off on Stocks above.