Jamieson Wellness (TSX:JWEL) is a leading Canadian manufacturer, distributor, and marketer of supplements and natural health products. The stock was down 16.7% in 2019 as of close on February 27. Shares had dropped 15% year over year.
Jamieson stock took a hit after its third-quarter earnings release back on November 6. The company experienced a delay in shipments within its Strategic Partners segment. This caused Jamieson to narrow its revenue guidance for the full year. The stock bounced back in December and January but has experienced weakness in February.
Back in January, I’d discussed why Jamieson was a growth stock to trust over the next decade. Last summer, I’d also explained why the growth of the supplements and sports nutrition market was promising for Jamieson’s growth trajectory. When its IPO launched, CEO Mark Hornick explained how changing demographics could drive supplements market growth. These products have grown in popularity among the baby boomer demographic.
Jamieson released its fourth-quarter results after trading closed on February 27. Before its earnings release, the stock appeared to be in a nice price range for those looking to jump in. Jamieson stock boasted an RSI of 24 as of close on February 27, indicating it was oversold. This has been the case since early February.
In the fourth quarter, the company reported revenues of $99.1 million, which was an 18% increase from the prior year. Adjusted net income surged 25% to $12.2 million and adjusted EBITDA increased 22% to $22.9 million. In the fourth quarter, the company noted that revenue in the branded segment posted 12% growth from Q4 2017. Jamieson also reported 16% growth in the Jamieson brand domestically and 26% growth internationally.
For the full year, Jamieson saw revenue rise 6% to $319.8 million. Adjusted EBITDA climbed 10% to $67.6 million and adjusted net income rose 22% to $33.7 million. Overall, it was a solid year as Jamieson was able to achieve its full 2018 guidance in revenue, adjusted EBITDA, and adjusted earnings per share. The company maintained its quarterly dividend of $0.09 per share, which represents a 1.9% yield as of this writing.
Jamieson released its 2019 guidance and projects revenue growth between 5% and 9%. The company forecasts that its Jamieson Brands segment will achieve 25-35% international growth and 3-5% domestic growth. Revenue growth is not quite in line with what analysts may have liked to see, but Jamieson looks strong coming into the next fiscal year.
The S&P/TSX Composite Index has surged in the first two months of 2019. Bargains, especially quality ones, are hard to find right now. This strengthens Jamieson’s case as a solid target, at least immediately following its Q4 earnings release. As of this writing, the stock is firmly in oversold territory. Investors can add this stock to their portfolios in anticipation of steady growth in the long term. It also offers a modest dividend for those seeking some income.
