How companies like Sports Endurance, Inc. (OTC: SENZ) are closing the gap with major supplement providers.
The Age of Supplements is upon us, as growth in the supplement sector continues at an incredible pace. And for investors, the opportunity couldn’t be more obvious.
According to the 2016 Consumer Survey on Dietary Supplements, conducted by Ipsos Public Affairs, 71% of US Adults take dietary supplements.
This represents a significant rise in adult usage, compared to a 2004 study by the Office of Dietary Supplements, National Institutes of Health, which resulted in only 52% taking dietary supplements.
But the increase in usage is only part of the story.
For investors, the appeal is through the actual scale of the dietary supplement market, which is reaching record levels each year. There are still plenty of opportunities to get in at an early stage with a contender before they take off.
According to a new economic impact report funded by the Council for Responsible Nutrition (CRN), the dietary supplement industry in the US alone is worth $121.6 billion.
And it just keeps growing…
Last month a Global Dietary Supplements Market 2017-2021 report predicted the global dietary supplements market will grow at a CAGR of 6.5 by 2021. And another outlet, Grand View Research, published a report in 2016 predicting the market would reach $278.02 billion by 2024, with the sports nutrition sector expected to be worth $37.16 billion.
U.S. dietary supplements market revenue, by end-use, 2013 – 2024 (USD Million)
Employing more than 750,000 Americans, and generating nearly $15 billion a year in tax revenues, the dietary supplement industry is quietly racking up major milestones, while making people rich.
Unlike the pharmaceutical industry, dietary supplements hold several major advantages from a profitability standpoint. Products in the supplement space don’t typically require lengthy and expensive FDA trials, or extensive development to address legitimate health concerns. Instead, products can be proven effective, and be on shelves in a much, much shorter time frame than their prescription based cousins from the pharma sector.
That’s why investors are looking for the next big supplement company to partake in—they don’t want to miss out on the next big supplement story like Herbalife [NYSE: HLF] has been over the last 10 years.
On the radar for investors looking for a blue-chipper with a lot of upside left is up-and-comer, Sports Endurance Inc. [OTC: SENZ], which carries many similar attributes of Herbalife’s early days, and a growth strategy backed by three effective flagship products: Ultra Peak T, Pain-Freeze Recovery Gel, and Sports Leg and Lung Formula which is now available on Amazon.
Given their high profit margins, and effective marketing strategies, Sports Endurance Inc. has specific strengths that put them ahead of the curve in the sector, and thus are this report’s Sector Spotlight.
SECTOR SPOTLIGHT: SPORTS ENDURANCE INC. [OTC: SENZ]
Mkt Cap: $61.8 million
With a focus on three areas of health that the company believes most directly impact the lives of active adults (Total Wellness, Performance, and Recovery), Sports Endurance Inc. is making strides with its flagship products Ultra Peak T, Pain-Freeze Recovery Gel, and Sports Leg and Lung Formula.
Ultra Peak T targets male testosterone issues, with its all natural formula built to reinvigorate male testosterone levels. The product’s nutrient and ingredient profile is supported by science, endorsed by researchers, and is considered an excellent supplement for men with low testosterone levels seeking alternative treatments to prescription drugs.
There has been an inexplicable generational drop in male testosterone levels, which has been in steady decline for the last few decades.
Low testosterone can have serious detrimental effects to male health, including declines in sex drive and sperm production, deteriorating muscle mass/strength, irregular fat distribution, loss of bone density, and negatively effecting red blood cell production. Low testosterone can also effect mood, sleep patterns, fatigue, and other life altering changes.
As the population ages, and more and more cases of low testosterone levels are diagnosed, there will be an influx of more effected men looking for treatments to pull them out of their low-t situation.
Ultra Peak T is supported by Tavis Piattoly (MS, RD, LDN), who holds the distinction as the Sports Dietitian and Nutrition Consultant for the NFLPA Brain and Body Program at the Tulane Institute of Sports Medicine, Covington Orthopedic, and Fairchild Sports Performance and prior roles as Dietitian for the New Orleans Saints, New Orleans Pelicans, and Tulane University Athletics (2002-2016).
While active males are definitely the target for Ultra Peak T, Sports Endurance does promote products across the genders, in particular athletes looking to boost their athletic performance.
Sports Leg and Lung is a pre-workout drink powder that is designed to boost performance for active adults across a spectrum of athletic activities. With its proprietary blend of primary ingredients that include the patented and clinically-tested performance ingredient, Carnosyn® Beta-alanine, and L-Taurine.
The product’s effectiveness has been solidly proven through Sports Endurance Inc’s studies which resulted in over 90% of test takers experiencing almost immediate benefits. In the endurance business, these are remarkable results.
Based on those two products alone, and the rapid growth in demand for their types of results, Sports Endurance has a bright future ahead for investors looking for an early entry point into the space.
Timing is everything, and Sports Endurance at this stage presents a rare opportunity to get in ahead of the curve.
Within the last 45 days, the stock was given a strong endorsement (72% BUY rating calculated from 13 indicators) by BarChart.com, and that was when the stock was at the $1 level. Technical analysis on SENZ pegged the company to have no problem reaching the $1.97 level, and very little has changed since that assessment was made.
Summer selling and other minor events have presented an even GREATER opportunity for SENZ as an investment, as the stock is now currently trading at just under $0.80. With the announcement of greater market access through selling products on Amazon, there is a pathway for SENZ to find its way back to the $2 level it has already seen in the last year, and with very little traded volume required to get it there.
Given that Ultra Peak T only hit the market 5 months ago, and Sports Leg and Lung followed only a month later, the company will only grow its product line out, and increase its marketing reach for its products further in the year ahead.
Investors who paid attention the growth story of Herbalife will remember its early beginnings with very few products to sell, but that it was backed by a very strong direct-sale strategy that now SENZ is implementing today.
Herbalife is now trading at over $67 per share, and has a market cap of over $6 billion. It was not an overnight success, however, over its company’s history, Herbalife has given its investors several climbing peaks, and smile-inducing dividends over the past decade.
There’s no denying that the business model works, creating impressive profits for marketers, distributors, and all other stakeholders in the company.
Thus there’s reason to see why Sports Endurance has the potential to endure the ride to highs that others in the sector have successfully hit.
At under $1 per share, Sports Endurance has plenty of upside left to carry the company and its investors to towering heights. The company continues to grow sales dramatically year-over-year, and there doesn’t seem to be any indicators of that pattern stopping any time soon. There are still plenty of products left for the company to develop and promote, each bringing new opportunities for market exposure, product diversification, and thus reinforcing the fact that right now is the time for any newcomer to see this as the perfect entry point.
SUPPLEMENT COMPARABLES
With the high profit margins, easier access to market, and growing demand in the sector, it’s no wonder that the dietary supplement space is attracting a faithful investment following.
High returns are the name of the game, and the nutritional supplement producers know this, as do their investors who were lucky enough to come across the space.
So, while SENZ still represents a golden opportunity to get an early start on yet another nutritional supplement growth story, it’s important to examine other players in the space.
Herbalife [NYSE: HLF]
Mkt Cap: $6.5 billion
Herbalife is possibly the most well-known supplement provider on the market. As a global multi-level marketing company that develops, markets, and sells nutrition supplements, weight management, sports nutrition, and personal-care products, Herbalife has grown since 1980 to its latest net sales level of $4.488 billion in 2016. However, the growth for the company was stagnant from 2015, which was practically on par with 2016, and a net income of $260 million, which was a 23% drop from the year prior.
USANA Health Sciences, Inc. [NYSE: USNA]
Mkt Cap: $1.41 billion
USANA is a network marketing company that like Herbalife also develops and manufactures nutritional, personal care, and weight-management products. USANA’s reach goes beyond just North American markets, as the company also boasts its subsidiary BabyCare, Ltd. which operates a similar business in China.
Natural Alternatives International, Inc. [NASDAQ: NAII]
Mkt Cap: $68 million
Natural Alternatives International produces customized nutritional supplements to address specific health conditions. With state-of-the-art manufacturing facilities in San Marcos, California and Lugano, Switzerland, and a sales presence in Yokohama, Japan, NAI fulfills the needs of its customers around the world. NAII has seen steady revenue and earnings growth, with 2016 being a strong year in particular with nearly 44% growth in revenue from $79.5 million in 2015 to $114.2 million in 2016. However, at its current stock price of $9.80, NAII needs to see some other gains to return to its 52-week high of $14.40.
RECOMMENDATION: SENZ GOING FORWARD
With room for significant expansion in its product line, and a history of aggressive marketing, Sports Endurance [SENZ] provides a rare opportunity at an affordable entry point for investors looking for nutritional supplement exposure.
The SENZ team has shown it can take initiative and aggressively market its product lines, while encouraging its growing client base with ample amounts of information through the company’s blogs, social media awareness campaigns, and steadily increasing amount of expert endorsements.
The general population is taking greater personal responsibility for their health, and SENZ is doing a lot of great things to insert itself as leaders in the personal health movement.
The nutritional and dietary supplement sector provides ample reasons to be bullish, and SENZ is adapting quickly to the market in order to establish itself among the heavy hitters such as Herbalife.
If SENZ can even capture one percent of the business that Herbalife and other majors in the sector have already proven is out there, it has the opportunity to be the most profitable nutrition stock you will own this year.
// USA News Group
Staff Writing Team
