I just wanted to share with
you some highlights of their conference call that has just finished and why I
continue to like the stock and believe it will continue to perform and should
reach my 15$ price target later this year.
Their CEO was very upbeat
about their future, saying they have just scratched the surface of their
growth, with the goal of being a 500Mil$ revenues in the coming years. Social
media (Facebook and Twitter) is their favorite advertising platform as it
touches their targeted audience with hardly any costs.
- Management number
1 goal is profitability.
- Gross margins
were super strong in 1Q reaching 35.6% and management reiterated their will
meet or beat their 2014 goal of 33%
- Arnold Schwarzenegger brand that
launched end of September 2013, represented roughly 30% of their 50Mil$ revenue
in the quarter meaning 15Mil$. This is the best launch in history of any Sports
Nutrition product. These results are much higher than management had expected,
and their goal for this brand is to hit 100mil$ in revenues in the next 2
- The brick &
mortar world (GNC and Vitamin Shoppe) offers a huge upside potential as GNC for
the moment is only 5% of their business.
- International saw
190% growth year over year
- Company continues
to invest in safety and effectiveness of their products, and we should see very
soon some publications showing the benefit of using MSLP products. This team of
R&D is headed by a former FDA advisor.
- New product
launches will take place in end of 3Q early 4Q. They plan to have a read to
drink offering, and also an energy product passed on a new drops technology.
- SEC investigation
should hopefully be behind the Co by end of 2Q and then they will apply for the
- Seem very
comfortable with their new guidance of revenues of 165-175Mil$ and EPS of
41-51cts. I believe those numbers will prove conservative. Having a company
increase it’s guidance only 3 months after providing them in late January shows
they feel very relax.