Here's Why Giggles N Hugs Inc (OTCMKTS:GIGL) Is A Real Opportunity
By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Stocks / on Friday, 20 Jan 2017 02:02 AM
https://www.insiderfinancial.com/giggles-n-hu...em/119159/
When it comes to over-the-counter stocks, one of the most important traits an investor can have is a degree of cynicism. The vast majority of companies at this end of the market are pumped up by false claims and valuations, and this has led to the reputation that now encompasses so-called penny stocks. Every so often, however, a company comes along that seems to buck the trend, and stands out as one with genuine growth potential.
Giggles N Hugs Inc (OTCMKTS:GIGL) is one such company.
As things stand, Giggles N Hugs commands a market capitalization of just $1.7 million, and trades for $0.03 a share. Average volume comes in at around 2 million daily, and awareness surrounding the stock (and the company that underlies the ticker) is extremely low. Combine the current standings of the company from an operational perspective, however, with its near-term potential for growth, and these numbers look set to alter dramatically across the next 12 months.
For those not familiar with Giggle N Hugs, it is a restaurant brand that – right now – is based in California. It has three active locations, all of which are located in malls in California, and is looking to expand throughout 2017 by way of a company owned rollout as well as a franchise package. So far, pretty boring, but this is where things get interesting.
The restaurants that the company owns are designed to combine healthy eating with playtime and activity for children. It is essentially a giant play area, where parents can take children for healthy food, and where said children are entertained with various activities (new activities initiated every half hour at the current locations) including arts, crafts, face painting, games etc. The company also offers a child drop off service, where parents can leave their children at the premises while they shop in the mall. It is the first and only restaurant company to do this in Los Angeles.
That no other company provides this sort of healthy food with playtime offering is difficult to believe, but it’s true – Giggles N Hugs is first to market with this concept, and it is taking off. The company attracts scores of celebrity clientele, but from a cost perspective, positions itself very competitively. It’s birthday parties, for example, from which it derives more than 40% of its revenues, offer far more than its competitors offer (Chuck E. Cheese’s, McDonald’s Corporation (NYSE:MCD) etc.), but do so for a lower price ($350 for 15 children, compared to the $400 and upwards charged by its competitors).
The relationship the company has with its premises landlords (mall owners such as Westfield) further demonstrates the growth potential of this company. Said owners offer a 75% discount (minimum) on rent in the current locations, just to get Giggles N Hugs to open the location in their premises, based on the footfall these locations attract.
The numbers reinforce the thesis as well. The company has grown revenues from $1.3 million in 2012 to $3.5 million during 2015 – a 25.3% compound annual growth rate. In a $1.2 million initial investment, franchisees can expect payback in two and half years, and $1.9 million revenues by year three ($357K EBITDA).
This year, the company plans to expand from three locations to twelve, with a focus not just on the West Coast but also the East Coast. Why the East Coast? Because revenues increased dramatically on business days when weather is bad. As such, the central East Coast revenues considerably outweigh potential West Coast revenues.
From a catalyst perspective, nine stores in a year is great news for investors.
Management is also incredibly strong. Founder and CEO Parsi spent 20 years on Wall Street, with Sutro, Lehman and TD Waterhouse, managing more than $350 million in assets. President Kaufman is the former COO of California Pizza Kitchen, and grew the company from two stores to seventy before selling to PepsiCo, Inc. (NYSE
EP). CFO, Philip Gay, served as CFO at CPK while Kaufman was COO.
Bottom line here is that this is a rare opportunity in an over-the-counter stock that genuinely looks as though it has real growth potential, and has underlying business fundamentals that supports this thesis.
By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Stocks / on Friday, 20 Jan 2017 02:02 AM
https://www.insiderfinancial.com/giggles-n-hu...em/119159/
When it comes to over-the-counter stocks, one of the most important traits an investor can have is a degree of cynicism. The vast majority of companies at this end of the market are pumped up by false claims and valuations, and this has led to the reputation that now encompasses so-called penny stocks. Every so often, however, a company comes along that seems to buck the trend, and stands out as one with genuine growth potential.
Giggles N Hugs Inc (OTCMKTS:GIGL) is one such company.
As things stand, Giggles N Hugs commands a market capitalization of just $1.7 million, and trades for $0.03 a share. Average volume comes in at around 2 million daily, and awareness surrounding the stock (and the company that underlies the ticker) is extremely low. Combine the current standings of the company from an operational perspective, however, with its near-term potential for growth, and these numbers look set to alter dramatically across the next 12 months.
For those not familiar with Giggle N Hugs, it is a restaurant brand that – right now – is based in California. It has three active locations, all of which are located in malls in California, and is looking to expand throughout 2017 by way of a company owned rollout as well as a franchise package. So far, pretty boring, but this is where things get interesting.
The restaurants that the company owns are designed to combine healthy eating with playtime and activity for children. It is essentially a giant play area, where parents can take children for healthy food, and where said children are entertained with various activities (new activities initiated every half hour at the current locations) including arts, crafts, face painting, games etc. The company also offers a child drop off service, where parents can leave their children at the premises while they shop in the mall. It is the first and only restaurant company to do this in Los Angeles.
That no other company provides this sort of healthy food with playtime offering is difficult to believe, but it’s true – Giggles N Hugs is first to market with this concept, and it is taking off. The company attracts scores of celebrity clientele, but from a cost perspective, positions itself very competitively. It’s birthday parties, for example, from which it derives more than 40% of its revenues, offer far more than its competitors offer (Chuck E. Cheese’s, McDonald’s Corporation (NYSE:MCD) etc.), but do so for a lower price ($350 for 15 children, compared to the $400 and upwards charged by its competitors).
The relationship the company has with its premises landlords (mall owners such as Westfield) further demonstrates the growth potential of this company. Said owners offer a 75% discount (minimum) on rent in the current locations, just to get Giggles N Hugs to open the location in their premises, based on the footfall these locations attract.
The numbers reinforce the thesis as well. The company has grown revenues from $1.3 million in 2012 to $3.5 million during 2015 – a 25.3% compound annual growth rate. In a $1.2 million initial investment, franchisees can expect payback in two and half years, and $1.9 million revenues by year three ($357K EBITDA).
This year, the company plans to expand from three locations to twelve, with a focus not just on the West Coast but also the East Coast. Why the East Coast? Because revenues increased dramatically on business days when weather is bad. As such, the central East Coast revenues considerably outweigh potential West Coast revenues.
From a catalyst perspective, nine stores in a year is great news for investors.
Management is also incredibly strong. Founder and CEO Parsi spent 20 years on Wall Street, with Sutro, Lehman and TD Waterhouse, managing more than $350 million in assets. President Kaufman is the former COO of California Pizza Kitchen, and grew the company from two stores to seventy before selling to PepsiCo, Inc. (NYSE
EP). CFO, Philip Gay, served as CFO at CPK while Kaufman was COO. Bottom line here is that this is a rare opportunity in an over-the-counter stock that genuinely looks as though it has real growth potential, and has underlying business fundamentals that supports this thesis.
