Olivier Colombo - Consultant & Corporate Advisor
My Blog

Fibo Cologne April 3rd - 6th - MusclePharm booth visit

I did spend 2 days at the Fibo Power in Cologne who is Europe's largest fitness event and had the opportunity to speak to Sydney Rollock Chief Marketing Officer and Brent Baker their head of International Sales (he used to work at AES Sports Nutrition before they were bought by Abbott). I was very impressed by their professionalism and passion for their company. I'm now convinced that they do have the necessary top managers to bring this brand to much higher levels.

The MusclePharm booth was always surrounded by a big crowd and visitors were willing to stay in line for over 30min to be able to have an autograph from CT Fletcher who is a six-time world champion powerlifter.

Following last conference call, I have decided to doubled my position and it is now my largest investment in my portfolio.

Reasons why I think now is time to have a second look at MSLP

  • The only well-established Sports Nutrition listed company in the US
  • Plan to become the number 1 in their category
  • Nasdaq listing sometime this year, enabling research firms to pick up coverage
  • Revenues will grow to 150mil$ vs 110mil 2013 (had guided 100mil$) and 67mil$ in 2012. I believe they will come much higher than 150mil$...
  • Will be profitable for the 1 time with earning expectations of 20-22cts per share
  • Gross margins will go from 30 to 33% with a target of 40% over time.
  • Share buyback (5mil$) that will resume a few days after 1Q14 is reported
  • Looks like they will not need to raise capital, thanks to your positive cash flow expectations in 2014
  • Launch of 8-10 new products
  • Partnership with Costco is on fire
  • Arnold product line is doing better that planed
  • Q1 looks to be ahead of internal expectations
  • Will soon start to do some roadshows in the US thanks to their new IR firm Pondel Wilkinson (they have been IR of Monster Energy (MNST) for the past 13 years)
  • Management purchased shares in December and will not be surprised to see them buy again after 1Q is reported.
  • Very undervalued, should be trading at 1x 2014 sales of 150Mil$, that would imply a stock around 15$