There’s usually a tonne of hype surrounding an IPO. You know, the whole boom-and-bust game that speculative traders love to play? It’s a given for almost any IPO, but when it came to vitamin manufacturer Jamieson Wellness Inc. (TSX: JWEL), the hype was pretty muted, paving the way for a relatively quiet 2017 IPO.
Why would a low-tech vitamin company go public after nearly century in business?
It just didn’t make a lot of sense to many at the time, but as we approach Jamieson’s one-year anniversary as a publicly traded firm, it’s clear that company is a growth powerhouse that was (and still is) disguised as a low-growth, low-dividend stalwart that’s unworthy of a growth-savvy investors’ portfolio.
The stock has soared over 55% in just under a year, as investors had the chance to warm up to the low-tech growth firm that’s poised to capitalize off two major long-term tailwinds: the ageing baby boomer population and peak spending of health-conscious millennials. Add new product launches and Chinese expansion prospects into the equation, and you’ve got yourself an incredible growth stock that now has the capital it needs to take off like a coiled spring.
New product lineup likely to fuel massive organic growth over the short term
Aided by a brand that’s been built on many decades worth of trust, Jamieson now has the financing (and pricing power) it needs to aggressively expand upon its product lineup.
Recently launched products like “Essentials + Protein” have shown promise in fueling organic sales growth, but Jamieson is not stopping at a handful of new offerings! The company plans to release up to 50 products by the conclusion of 2018. And through a beefed-up marketing campaign, Jamieson will be able to inform consumers of its new offerings as soon as they’re available to the general public.
Such new products are a relatively low-risk way to grow the top and bottom line, since many Canadian consumers are already loyal to Jamieson brand and its immediately recognizable green-cap products.
Bottom line
Jamieson is an easy-to-understand business with wonderful near- and long-term growth catalysts. Over the next year, expect organic growth from new products to fuel a rally to higher levels. And over the long term, keep an eye on Jamieson’s expansion into China.
If Jamieson can successfully navigate through the obstacle course of changing regulations, I suspect that it will be able to capture a meaningful slice of China’s $17 billion VMS market. Jamieson is already a top five foreign brand in China, so a green light from regulators could easily fuel a profound amount of growth that’s unfathomable to many.
Personally, I’m waiting for the stock to pull back before jumping in, but I realize such a dip may never end up happening. So, if you’re keen on getting some skin in the game today, I have no problem recommending shares at the $26 levels.
Stay hungry. Stay Foolish.
