Jamieson Wellness Inc. (TSX:JWEL) is a relative newcomer to the TSX that you may not have been introduced to yet. This stock offers investors a compelling risk/reward trade-off at current levels, despite being a stock that average Canadian investors may be unfamiliar with.
Jamieson is a vitamin and mineral company that’s been around for nearly a century. You probably have a tonne of Jamieson essential supplements in your medicine cabinet without even knowing it. Jamieson products come with the recognizable green cap, and over the decades, the brand has built quite a solid reputation for itself.
The company has come a long way, and it may come as a shock to you to find out that the company isn’t a subsidiary of a larger publicly traded firm, like many other established players in the space. Although Jamieson is in the seemingly “boring” and “old-fashioned” no-moat business of vitamins and minerals, the company has, in fact, built a wide moat for itself in the form of its brand. And going forward, the company’s poised to expand its global reach and its product line, as the ageing baby boomer generation accelerates their pill consumption as their aches and pains begin to mount.
A wide-moat business in a no-moat industry?
Make no mistake, any startup firm could easily create a competing firm of their own, but they’d be pressed to see a magnitude of sales that are close to that of Jamieson.
The unmistakable green-cap product is something that Canadians have grown to trust over the decades; it’s this kind of trust that can only be earned with time. When you’re purchasing something meant for your health, you really can’t afford to risk taking a supplement with sub-par manufacturing or quality standards. Instead of doing all the research to ensure what they’re taking is of high-quality, most would just reach for the green-capped product in the pharmacy aisle. After all, who would want to research tonnes of products on their smartphones to save a buck or two?
Jamieson has a pretty wide moat that many investors don’t give it credit for. The real value of its reputation and brand is not reflected in the company’s balance sheet. Thus, I believe shares may be a better value than popular metrics would indicate. This, when combined with promising long-term growth prospects, makes Jamieson one of the most compelling low-tech growth IPOs to hit the TSX in recent memory.
Given the predictable nature of its low-tech growth profile and favourable forward-looking trends, I’d recommend getting some skin in the game today with the intention of picking up more shares on a meaningful pullback.
Stay hungry. Stay Foolish.
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Fool contributor Joey Frenette has no position in any of the stocks mentioned.