Insider Financial Article out this morning:
Giggles N Hugs Inc (OTCMKTS:GIGL) has been one of our strongest picks year to date. Back when we first looked at the company it was trading in and around $0.01-$0.02 a share. At last close, the company went for $0.1, down from end-Feb highs of $0.15. Even post correction, then, and to-date, that’s a more than 1500% run.
We’re now heading into the close of the first quarter, and we think this might be just the start of a longer term upside revaluation. As we’ve said in the past, this is something of a rare gem in the sub penny space. It’s a company that has solid revenues, a unique offering in a space that’s crying out to be filled and – so far at least – what seems to be a very competent management team. It’s also got a very promising growth strategy and some pretty ambitious targets – he former of which it seems to be delivering on, and the latter of which it is hitting against.
So why are we looking at the company now?
Well, Giggles N Hugs just announced a new brand expansion strategy, and we think that the announcement could serve to help support price at current levels, put an end to the recent corrective action, and – by proxy – mark the return of the overarching upside momentum we’ve seen in the stock year to date.
Before we get into the latest announcement, let’s quickly touch on what the company is and what it does to bring newer readers up to speed. This one is a restaurant play, with a focus on kids. Basically, the company opens restaurants that are designed to be clean, pretty upmarket and fun, while offering a range of healthy foods for both parents and their children. The locations put on shows in the evenings (magic shows, puppet shows, that sort of thing) and has recreational areas in which the kids can play during the day, before and after they eat. It’s also a big birthday party venue, something that we looked at in quite a lot of detail when we first highlighted the company as being one to watch, that is positioned as cheaper and healthier than its competition. Think of it is a sort of Chuck E Cheese with chicken panini’s instead of chicken nuggets.
Right now, its locations are centered around California, and specifically, LA, but a franchise rollout and an East Coast strategic entry will see the company expand considerably very near term.
So what does the latest announcement mean for the company?
Well, at core, it’s basically a celebrity endorsement. The company has brought Jillian Michaels on board as a Global Ambassador. For those not familiar with Michaels, she’s a health and wellness star in the US, who makes money through self branded workout DVDs, books, recipe based applications, that sort of thing. Now, a celeb endorsement isn’t going to change an already established company overnight, but for a penny play of this size, someone like Michaels could make a real difference, and quickly. She’s got more than 1.5 million followers on Twitter Inc (NYSE:TWTR) and around 1 million on Instagram. She’s known for having a faithful social media following, and there’s some real influence on offer here. In other words, a portion of these followers could very quickly become Giggles N Hugs customers, and this could inject some real upside into the company’s valuation.
The deal sees her become a big shareholder of the company, so exactly how any mentioning of the company through her social media accounts will be structured remains unclear, but there’s no doubt we will see some such mentioning, and when we do, it’s going to bring this relatively under the radar name a big step closer to the mainstream.
As ever, dilution is always on the cards with a play like this, so keep that in mind before committing. The company doesn’t have enough cash to see it expand to meet its targets, so a raise is almost inevitable. That said, the upside on offer if these targets are met should easily outweigh any dilutive downside.
We will be updating our subscribers as soon as we know more. For the latest updates on GIGL, sign up below!
Sign up for next microcap runner ahead of the crowd.
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Disclosure: We have no position in GIGL and have not been compensated for this article.
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https://www.insiderfinancial.com/giggles-n-hu...ce/120031/
Giggles N Hugs Inc (OTCMKTS:GIGL) has been one of our strongest picks year to date. Back when we first looked at the company it was trading in and around $0.01-$0.02 a share. At last close, the company went for $0.1, down from end-Feb highs of $0.15. Even post correction, then, and to-date, that’s a more than 1500% run.
We’re now heading into the close of the first quarter, and we think this might be just the start of a longer term upside revaluation. As we’ve said in the past, this is something of a rare gem in the sub penny space. It’s a company that has solid revenues, a unique offering in a space that’s crying out to be filled and – so far at least – what seems to be a very competent management team. It’s also got a very promising growth strategy and some pretty ambitious targets – he former of which it seems to be delivering on, and the latter of which it is hitting against.
So why are we looking at the company now?
Well, Giggles N Hugs just announced a new brand expansion strategy, and we think that the announcement could serve to help support price at current levels, put an end to the recent corrective action, and – by proxy – mark the return of the overarching upside momentum we’ve seen in the stock year to date.
Before we get into the latest announcement, let’s quickly touch on what the company is and what it does to bring newer readers up to speed. This one is a restaurant play, with a focus on kids. Basically, the company opens restaurants that are designed to be clean, pretty upmarket and fun, while offering a range of healthy foods for both parents and their children. The locations put on shows in the evenings (magic shows, puppet shows, that sort of thing) and has recreational areas in which the kids can play during the day, before and after they eat. It’s also a big birthday party venue, something that we looked at in quite a lot of detail when we first highlighted the company as being one to watch, that is positioned as cheaper and healthier than its competition. Think of it is a sort of Chuck E Cheese with chicken panini’s instead of chicken nuggets.
Right now, its locations are centered around California, and specifically, LA, but a franchise rollout and an East Coast strategic entry will see the company expand considerably very near term.
So what does the latest announcement mean for the company?
Well, at core, it’s basically a celebrity endorsement. The company has brought Jillian Michaels on board as a Global Ambassador. For those not familiar with Michaels, she’s a health and wellness star in the US, who makes money through self branded workout DVDs, books, recipe based applications, that sort of thing. Now, a celeb endorsement isn’t going to change an already established company overnight, but for a penny play of this size, someone like Michaels could make a real difference, and quickly. She’s got more than 1.5 million followers on Twitter Inc (NYSE:TWTR) and around 1 million on Instagram. She’s known for having a faithful social media following, and there’s some real influence on offer here. In other words, a portion of these followers could very quickly become Giggles N Hugs customers, and this could inject some real upside into the company’s valuation.
The deal sees her become a big shareholder of the company, so exactly how any mentioning of the company through her social media accounts will be structured remains unclear, but there’s no doubt we will see some such mentioning, and when we do, it’s going to bring this relatively under the radar name a big step closer to the mainstream.
As ever, dilution is always on the cards with a play like this, so keep that in mind before committing. The company doesn’t have enough cash to see it expand to meet its targets, so a raise is almost inevitable. That said, the upside on offer if these targets are met should easily outweigh any dilutive downside.
We will be updating our subscribers as soon as we know more. For the latest updates on GIGL, sign up below!
Sign up for next microcap runner ahead of the crowd.
Submit
Disclosure: We have no position in GIGL and have not been compensated for this article.
FacebookTwitterGoogle+Share
https://www.insiderfinancial.com/giggles-n-hu...ce/120031/
