As the pandemic eases its grip on a hungry nation, paying attention to companies in the food and beverage sector may be a wise choice. Hospitality stocks across the board have seen valuations get crushed. In many cases, those losses make sense, especially to those that saw revenues decrease sharply over the past year. However, not all stocks deserve to be included in the downdraft. Gourmet Provisions International Corp (OTC: GMPR), for instance, shows that despite massive logistical interruptions to the sector, it can still grow its brands and position to emerge stronger than ever in the back half of 2021.
Like its competitors, GMPR shares are off their 52-week highs. But, within investment circles, that decline could be exposing a substantial valuation opportunity. And GMPR makes the case stronger by adding significant talent to its leadership team, making potentially transformative acquisitions, and diversifying its product and asset portfolio to strengthen and de-risk its long-term strategic plan.
Today, GMPR has evolved from a three-store pizza business to one that has multiple shots at revenue-generating goals through four wholly-owned subsidiaries. And with the company well-positioned to capitalize on a strengthening economy that is ready to get social, GMPR is in the right sector at the right time to maximize near and long-term market opportunities.
Better still, they are making potentially transformative revenue-generating deals.
Beefing Up Its Product Arsenal
The company’s current stock price of $0.05 is not telling an accurate story. In fact, if not for the global market headwinds, deals in progress may have already taken the stock well beyond its 52-week high of $0.15. Still, holding these levels signifies the inherent value investors give the GMPR asset portfolio. Some competitors, once strong, have gone closer to zero.
Clearly, that’s not the case for GMPR. And while management would undoubtedly welcome a higher share price today, the excellent news is that they have a working strategy in place to earn back every dollar of valuation lost during the COVID-19 crisis. Adding Jack Brewer from Brewer Media Group as a Brand Ambassador helped kick off a solid start to 2021. The better news is that the efforts placed in Q1 set the stage for a potentially enormous back half of the year.
In fact, GMPR is already experiencing revenue-generating results from strategies that drive online sales and maximize market opportunities from its product pipeline. Boosting those efforts is a considerably stronger social media presence and a refined commitment to capitalize on strategic and accretive acquisition opportunities. Better still, with market analysts expecting the pace of industry consolidation to accelerate as a result of the pandemic-related slowdown, GMPR may be better positioned than ever to take advantage of acquisition and partnership opportunities. If all goes according to plan, GMPR will not only recoup every dollar of valuation lost but will also create a path toward new highs.
The excellent news is that Gourmet Provisions may be ideally positioned to hit that milestone. As a publicly traded company, GMPR has the unique opportunity to tap the capital markets for funding and capitalize on takeover or re-branding opportunities with small to mid-size food service locations. Keep in mind, too, GMPR is already in an enviable position to expand operations through its subsidiary brands.
In fact, GMPR could leverage its public market perks to expand operations at its wholly-owned subsidiaries, Jose Madrid Salsa, Pizza Fusion, Unique Tap House, and PopsyCakes. A licensing agreement with Christopher Street Products could also add additional near-term value if GMPR wants to invest in expanding that opportunity.
Notably, its Pizza Fusion subsidiary is already having a great start to the year, announcing in February an order expected to generate upwards of $675,000 in high margin revenues. Better yet, with consumer dining habits being forced to change, GMPR expects that order to be the first of many to meet the demands of dine-at-home consumers. If so, current share prices could skyrocket on a revenues multiple model.
And there’s more.
Celebrity-Partnered Brands Coming Soon!
Gourmet Provisions excited investors in April, announcing a partnership with a New York Times Best- Selling author & popular comedian. While GMPR is holding back the celebrity’s name for now, what they did say is that the “well-known” personality will help establish and launch a gourmet line of “celebrity-branded” food products starting with his personal line of pancake mix & syrup. The deal puts two things in play.
First, GMPR gets an additional revenue-generating product. Second, which could bode well for the stock, a catalyst from when the celebrity name is released and the marketing campaign officially starts. Incidentally, celebrity branding has become an enormous market, with everything from premium spirits to cupcakes being developed, endorsed, and launched into a demand-filled market. Companies like Constellation Brands (NYSE: STZ) and Cocoa-Cola (NYSE: KO) have been shelling out billions to own a stake in these niche brands.
Gourmet Provisions could attract the same attention. For the past six months, GMPR has been working with their partner and with New Hope Mills to develop what they believe will be a leading custom line of Gourmet Pancake Mix & Maple Syrup. Notably, GMPR will be seizing upon an enormous market opportunity, with Statista Research saying that more than 272.72 million Americans used pancake and table syrup in 2020. Thus, don’t shrug off the market potential on this deal.
Better still, with marketing a verifiable key to success, GMPR has been working closely with Parlor City Box Company to create a custom private labeled pancake mix box and syrup label designed to attract consumers with exciting colors and imagery. And while President and CEO James Vowler still needs to keep some of the details under wraps, he noted that his company is extremely excited to introduce his newest products to market and to the massive social media following of his celebrity partner. GMPR believes the products will provide an exponential boost to sales.
If so, a rally of significant proportion could follow.
Positioned To Accelerate Growth
What must be understood is that Gourmet Provisions is a survivor of one of the most unprecedented economic disruptions in history. Inventories were scarce, and deliveries from overseas were at a virtual standstill. Undoubtedly, the hospitality sector was the hardest hit by the effects COVID-19, which shut the doors at restaurants, bars, and event centers across the country. However, with the pandemic finally easing its grip on the United States, companies are ready for action. And GMPR is not shying away from its opportunity to maximize near term growth opportunities.
In fact, GMPR took steps to strengthen its balance sheet to accelerate growth. In February, GMPR announced executing Lock-Up agreements with their noteholders. These agreements limit each noteholder to convert a total of only eight million common shares until August 31, 2021. That’s a significant agreement that is beneficial to shareholders, the company, and the Noteholders.
It’s especially good because it removes a conversion feature that has kept a lid on the stock. Moreover, the deal provides Gourmet Provisions the time needed to audit financials, make its S-1 filing, sign an underwriter, and best of all to create the value required to qualify for its planned uplisting to the NASDAQ stock exchange.
Investors also are embracing the Authorized Share reduction from 3 billion to 300 million. Better still, GMPR has only about 75 million shares issued and outstanding. That relatively low share count could help drive valuations higher using peer-based revenue multiple models. And while the $233K profit in Q3 of 2020 went under the radar when announced, similar results or better in Q4 could earn greater investor attention. Thus, having the time to generate value from its near-term initiatives also limits potential dilution by noteholders later this year.
Thus, a convergence of balance sheet improvements, standstill agreements, product deals, and a strengthening economy are combining to make the remainder of 2021 a potentially huge period of growth for the company.
2021 Could Offer Enormous Opportunity
There’s a lot of moving parts to the Gourmet Provisions story. And the great news is that its strategies are designed to be accretive toward its common operational goals. Moreover, its growing revenues, new celebrity-partnered products, and its substantially improved capital structure should combine to position GMPR for potentially exponential near and long-term growth.
Undoubtedly, Gourmet Provisions has taken the proper steps at the right time to have its company emerge more potent than ever in 2021. A friendly lock-up on noteholders, a massive reduction in authorized shares, a strong Q3 that delivered $233 in profit, a $675,000 pizza Fusion deal, and a celebrity-partnered product launch that could attract millions in new revenues are a few things that make GMPR a diamond in the rough.
Its strengthened management team, its accretive and aggressive acquisition strategy, and its ability to maximize revenue-generating deals, however, is what will polish this rough diamond into a shiny micro-cap gem.
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