This Company may become a Takeover Candidate for a
Post# of 1240
December 11, 2017
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Cannabidiol, or CBD, is one of the fastest growing subsectors of the cannabis industry. Unlike THC, CBDs do not get you “high” yet it provides a wide range of health benefits. CBDs are legal in all 50 states and are not subject to the same strict regulations as THC. CBD-based products provide consumers a chance to benefit from the medicinal properties of cannabis without the impairment.
According to Statista, U.S. CBD consumer sales are expected to rise from $358.3 million in 2017 to $1.81 billion by 2022. Analysts believe that as more states legalize cannabis, CBD will continue to gain mainstream recognition
One company that could be a major benefactor from the CBD boom is American Premium Water Corporation (OTC Pink: HIPH).
Overview: American Premium Water Corporation (OTC Pink: HIPH)
American Premium Water Corporation (OTC Pink: HIPH) is engaged within the research, development, production, and marketing of premium consumer goods. The company maintains two businesses: LAlpina and Gents.
LALPINA
LAlpina is a line of biotech-driven water products. The flagship product LALPINAHydrogen, is a hydrogen-enriched water that contains no chemical additives and is designed to help maximize energy and health. American Premium Water Corporation (OTC Pink: HIPH) is currently getting ready to release its new LALPINA CBD Hydrogen water product, which is expected to launch during the first half of 2018. This would be the only CBD Hydrogen water product on the market.
The CBD product was first announced August 29, 2017, in which, the company signed an agreement with BioHemp Industries to produce and supply the company with USDA certified CBD oil.
“CBD can be delivered in a variety of ways, including water, but the hydrogen infusion takes CBD delivery to a whole new level. We’re really looking forward to working with American Premium Water to help add such a uniquely great option to their line,” detailed Jamie Allen BioHemp Industries CEO.
Gents
Gents is a luxury lifestyle brand, which offers fine apparel, hats and accessories. Gents products can be found at high-end retailers such as: Bloomingdale’s, Saks Fifth Avenue, Nordstrom, Inc. (NYSE: JWN), and online.
Gents recently entered into a licensing agreement with American Premium Water Corporation (OTC Pink: HIPH). The partnership provides American Premium Water Corporation (OTC Pink: HIPH) with multimillion-dollar revenue capabilities, as well as distribution and marketing networks.
“There’s a lot of natural synergy between Gents and Lalpina. We share a connection with celebrity and lifestyle, and Gents has the right infrastructure and retail distribution network that Lalpina will now utilize. So we’re not only adding significant top-line revenue to the company, but a first-rate management team as well,” details American Premium Water Corporation (OTC Pink: HIPH) Chairman and Founder Al Culbreth.
American Premium Water Corporation (OTC Pink: HIPH) has a market cap of just $491,694, as of November 2017. Furthermore, the company maintains a share structure consisting of 100 million shares authorized, 51.22 million shares outstanding, and a float of 785,085 shares.
HIPH: Recent News and Updates
Over the past couple of months, American Premium Water Corporation (OTC Pink: HIPH) has been extremely busy developing its business and positioning itself for a strong future.
October 19th– The company officially announced it has entered into a strategic partnership with Gents, which will add significant revenue and distribution resources.
October 26th– American Premium Water Corporation (OTC Pink: HIPH) Chairman and Founder Alfred Culbreth officially named Ryan Fishoff as the new CEO of the company. Mr. Fishoff has been a managing partner at Gents since 2016 and also has worked in private equity with CoBe Capital.
November 13th– The company announces it has reduced its convertible debt and derivative obligations by over 80% and improved the overall health of the balance sheet. Management notes that this is a major step, which will allow the company to continue to focus on raising capital, investments, mergers & acquisitions, brand development, strategic partnerships, and more.
Apparel Investing: How To Get The Biggest Bang
Large U.S. apparel companies have struggled in 2017, as the overall retail sector continues to face disruption from ecommerce and changing consumer habits. While the selloff may seem to be a buying opportunity for the larger retailers, investors should dig deeper into the fundamentals to avoid value traps. Large-cap retail and apparel companies may have greater brand awareness than their smaller competitors, but full saturation, lack of innovation and slowing growth continue to dim their outlook.
American Premium Water Corporation (OTC Pink: HIPH) is one small-cap apparel company that may prove to be a viable acquisition target for a larger corporation that is looking to re-jumpstart growth. The company owns and operates the high-end apparel brand, Gents, which is available across numerous luxury retails such as Saks Fifth Avenue, Bloomingdale’s, Nordstrom, Inc. (NYSE: JWN), and more. Here are three large-cap apparel companies that could benefit from acquiring American Premium Water Corporation (OTC Pink: HIPH):
Gap, Inc. (NYSE: GPS) operates as a casual apparel & accessories retailer. The company operates four main businesses: Gap, Banana Republic, Old Navy, and Athleta. As of November 2017, Gap, Inc. has a market cap of $11.62 billion and a share structure consisting of 392.16 million shares outstanding with a float of 236.63 million. During the company’s latest fiscal quarter ending on July 29, 2017, Gap, Inc. reported total revenue of $3.8 billion and net income of $271 million.
The Gap, Inc. has seen lack luster revenue results throughout the first two fiscal quarters of 2017. During the fiscal first, Gap, Inc. reported year-over-year revenue growth of 0.06%. However, revenue growth slipped 1.35% during the second, compared to the same period last year. When comparing the first two quarters of 2017 to its historical average revenue growth of 3.31%, the Gap, Inc. appears to be on a sales decline.
Abercrombie & Fitch Co. (NYSE: ANF) is engaged as a specialty retailer that offers a wide array of apparel, personal products, and accessories for the teen market. The company operates well-known brands, such as: Abercrombie & Fitch, Hollister, Gilly Hicks, and more. Abercrombie & Fitch Co. has a market cap of $1.14 billion, 68.09 million shares outstanding, with a float of 67.6 million as of November 2017. During the company’s latest fiscal quarter ending on July 29, 2017, Abercrombie & Fitch Co. reported total revenue of $779.32 million and a net loss of $15.49 million.
Abercrombie & Fitch Co. continues to see revenue growth slide, as the company continues to try to revamp its business and image. During the first quarter of 2017, the company saw revenues decline 3.56% compared to the same period last year. Furthermore, fiscal second quarter revenues skid 0.49% compared to the second quarter last year. Historically, Abercrombie & Fitch Co. has a strong year-over-year revenue growth rate of 5.37%. However, the company has continued to see revenue growth slip over the past five years. Management has failed to innovate and diversify the business away from its lackluster teen apparel brands. Abercrombie & Fitch Co. could benefit greatly from acquisition of the Gents brand through American Premium Water Corporation (OTC Pink: HIPH), which would diversify its apparel holdings into the luxury market.
The Buckle, Inc. (NYSE: BKE) is engaged as a casual apparel retailer, which develops a line of clothing, sportswear, footwear, accessories, and more. The company gears its product line to young men and women. As of November 2017, The Buckle, Inc. has a market cap of $1.12 billion and maintains a share structure consisting of 48.22 million shares outstanding and a float of 27.74 million. During the last fiscal quarter ending on July 29, 2017, The Buckle, Inc. reported total revenue of $195.65 million and net income of $11.48 million.
The teen apparel retail space can be susceptible to greater volatility than the rest of the market. Most teenagers do not have the ability to pay the sky-high price tags that teen fashion retailers demand. Also, teenagers may be more likely to feel peer pressured to where they shop in order to look “cool.” The Buckle, Inc. is one such teen retailer that is seeing a steady revenue decline over the past several quarters. During the company’s first fiscal quarter, revenue growth was down 12.85% from the same period in 2016. The second quarter saw revenue growth continue to decline, down 7.78% from a year ago. The Buckle, Inc. desperately needs to find a way to plug the sinking ship. Diversifying into a parallel market geared towards a slightly older audience than its current target could allow the company to see revenue growth stabilize and change direction. American Premium Water Corporation (OTC Pink: HIPH)’s Gents brand is a perfect acquisition candidate for The Buckle, Inc., as it would allow the company to diversify its business away from the sinking teen apparel market.
Gents Makes Enticing Acquisition Target For Apparel Branding and Wholesalers
American Premium Water Corporation (OTC Pink: HIPH)’s Gents subsidiary would be a great target for other apparel companies outside of retail, such wholesalers. Unlike their retail counterparts, wholesalers are the actual suppliers of the consumer goods. Rather than worrying about foot traffic and same store sales, wholesale apparel companies focus on providing their clients with top quality merchandise at the most competitive prices.
Wholesale apparel companies would greatly benefit from acquiring the Gents luxury apparel business from American Premium Water Corporation (OTC Pink: HIPH). Here are two specific wholesale apparel companies that could be potential takeover suitors:
V.F. Corporation (NYSE: VFC): The branded wholesale apparel company may not be a household name, but it supplies some of the most well-known clothing and accessory brands: The North Face, Vans, Timberland, JanSport, Reef, Lucy, Wrangler, Lee, and more. Furthermore, the company offers official licensed apparel under NFL, MLB, Harley-Davidson, Majestic, and more. As of November 2017, V.F. Corporation has a market cap of $28.99 billion and a share structure consisting of 395.15 million shares outstanding and a float of 391.21 million shares. During the company’s latest fiscal quarter ending on September 30, 2017, V.F. Corporation reported total revenue of $3.51 billion and net income of $386.14 million.
PVH Corp. (NYSE: PVH): The luxury apparel wholesale company is engaged within the designing, marketing, and distribution of men’s, women’s apparel and accessories. Furthermore, the company distributes some of the biggest names in luxury fashion: Kenneth Cole, Michael Kors, Tommy Hilfiger, Calvin Klein, Van Heusen, Geoffrey Beene, IZOD, Sean John, and more. As of November 2017, PVH Corp. has a market cap of $10.44 billion and a share structure consisting of 77.42 million shares outstanding and a float of 77.19 million shares. During the latest fiscal quarter, PVH Corp. reported total revenues of $2.07 billion and net income of $119.7 million.
At first glance, Gents seems to be a perfect fit for PVH Corp., as the wholesaler primarily focuses on luxury branded apparel. V.F. Corporation would still make a great home for Gents, but the company takes on a more diversified distribution approach than its competitor.
Overall, American Premium Water Corporation (OTC Pink: HIPH) is well positioned to benefit from the growing CBD demand, through its planned LALPINA CBD Hydrogen water product. Furthermore, the company’s Gents acquisition gives the company a chance to be a major acquisition opportunity for larger, lagging apparel companies. Utilizing the Gents brand, distribution and marketing network, American Premium Water Corporation (OTC Pink: HIPH) will then be able to develop a similar structure for its LALPINA brand. Overall, the company is positioned within two strong growth industries that will continue to be in robust demand.
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