Here’s why we are convinced that stocks like Sport Endurance, Inc. (OTC: SENZ) are on the cutting edge of a breakout market.
The numbers are impressive. More than two-thirds of American adults take dietary supplements each year, and according to a new economic impact report funded by the Council for Responsible Nutrition (CRN), the dietary supplement industry contributes $121.6 billion to the U.S. economy (about 0.68% of GDP). It also creates 754,645 jobs nationwide, and pays $38.4 billion in wages, not to mention generous taxes.
These numbers have investors asking how has this market been able to become so large and profitable? The answer lies in lifestyle choices and technology.
Thanks to a new, health-concerned millennial population, the nutritional supplement trend is booming and moving towards wellness and proactive care, especially sports nutrition.
The other major factor is online sales. The millennials are mobile, connected and they have created a whole new paradigm for buying online.
Put these two elements together and you have an extremely lucrative market with the potential for profits rivaled only by the marijuana boom.
We’re focusing on SENZ in the sports nutrition and proactive segment, but take a moment to look at a leader in the nutritional supplement space. Let’s pick an easy target; one that you likely know – Herbalife.
Ok, we get it. This stock has been controversial for different reasons. Mainly because of the way the company structured their sales commissions, but they appear to have cleared that hurdle and are moving on.
Here’s the Thing; Herbalife Ltd. Stock Jumped 14% in May!
Yes, the archetype nutritional supplement provider jumped on a better-than-expected earnings report after it posted a strong first-quarter earnings report. According to data from S&P Global Market Intelligence, the stock finished up 13.5% for the month of May.
As the chart below shows, the gains came following the company’s earnings release at the beginning of the month.
While Herbalife, which is a popular short, will remain a controversial stock, its business looks solid.
Here’s why we like what Herbalife demonstrates:
- They sell nutritional supplements
- The company continues to grow sales dramatically year-over-year
- It uses a direct sales model
- Its stock is now over $72 a share with a market cap of $6.75 billion
There is no denying it: this business model works and has created impressive profits for marketers, distributors and stakeholders in the company.
We’ve identified all the same qualities in SENZ, but it is still in the very early stages of development. For our readers, that means it is still affordable. Their stock is still under $1 a share. How long that will last is questionable as they continue to roll out new products, but it is low-priced right now.
Investors Simply Can’t Believe Just How Profitable These Products Are
It’s no wonder that companies in this space attract a faithful following. The products that they sell are incredibly profitable. They don’t typically require FDA trials or lengthy development and many of them address legitimate health concerns… things like fatigue, depression, decreased libido or sex drive, joint stiffness, aging and other wellness issues.
If you want to make 200%, 600% or as much as 800% on a product, nutritional supplements is one of the few markets where you can guarantee those kinds of returns. Nutritional companies know this and are quick to respond to consumer demand.
SENZ Has the Right Mix Right from The Get Go
Sport Endurance, Inc. develops, markets, and distributes innovative nutritional supplement products throughout the United States. Their primary focus is on three areas of health that most directly impact the lives of most active adults – Total Wellness, Performance, and Recovery.
In the company’s words, “We believe improved health contributes to and promotes a higher quality of life. It’s our goal to improve health by providing quality and effective nutritional supplements.”
While that may sound like a simple mission, it is especially challenging, since these companies live or die by providing products that are big sellers. That’s where we think that SENZ has already got a huge head start.
Sport Endurance has strategically focused on some the biggest money making areas of the nutritional markets: wellness, performance and recovery.
Its initial offering in the Men’s Health category is the natural testosterone booster Ultra Peak T.
The product is designed to help men over thirty overcome decreasing testosterone levels. Low testosterone has been linked to decreased muscle tone, reduced energy levels, and even depression.
Ultra Peak T has a nutrient and ingredient profile supported by the science and endorsed by researchers. It’s considered an excellent supplement for men with low testosterone levels who are looking for an alternative to prescription drugs.
On the purely sports endurance side, SENZ has just released a breakthrough pre-workout drink under the brand name Sports Leg + Lung. The product is a pre-workout drink powder that is designed to boost performance for active adults across a number of athletic activities. Its primary ingredients include a proprietary blend of the patented and clinically-tested performance ingredient, Carnosyn® Beta-alanine, and L-Taurine.
Is it effective? According to the company’s studies, over 90% of the people experienced almost immediate benefits. That’s a big deal in the endurance business.
The products have received early rave reviews and are supported by industry experts who Sport Endurance relies on to endorse their products.
For example, 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).
SENZ leverages its relationships with professionals in sports medicine and nutrition to get on top of the leading products.
Nutrition and Sports Nutrition Is Not A Bubble
It’s important not to look at this as a fad. It is not a bubble. The business is huge, extremely profitable and many public companies in the space are killing it.
It’s difficult to estimate the total value of the sports performance market, since there are a large number of crossover products, like infused sport beverages and foods. Let’s just say that it is already a very large piece of the $122 billion nutritional supplements pie – well into the billions.
The leading marketers have obviously caught on and are charging ahead with additives, beverages and supplements. These include Coke (Monster Energy), Pepsi (Gatorade) and Dr. Pepper, who are all on the leading front of this massive, multi-billion-dollar growth trend.
FEATURE STOCK: FOR COMPARISON
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The Winners: You Missed Out On These, But Still Good to Study
These stocks represent some of the stellar players in the nutrition and supplement market. There is a mix of large, medium and small cap stocks, but they demonstrate how successful this segment has been. They also show clearly just how prolific a company like Sport Endurance, Inc. could become using the right model.
Our Recommendation: We Give SENZ Our Strong BUY Rating
We see the opportunity for nutritional supplements and sports nutrition as a long and profitable road. There are many paths to go down from beverage enhancements to supplements and food additives. Any of these could be very successful given the right model, products and market strategy.
Our eyes are on the sports and endurance segments, along with the sports beverage market. These are potentially some of the biggest growth areas. Here’s why:
- The population is taking greater responsibility for personal health
- Peoples’ efforts are pointed towards wellness (being proactive through sport)
- Even millennials are looking to better nutritional care for a longer, healthy life
- Individuals are experiencing meaningful results gained from improved nutrition
.. all factors contributing to the massive health and sports nutrition markets where SENZ competes.
Who will be big winners?
Our money is on the innovators who attack the market… bring new ideas… take initiatives…use proven marketing models that have been time-tested by the leaders, like Herbalife and others.
That is the exact profile that we identified in SENZ that makes us give this company strong praise. They are focused, have great products and are supporting their efforts with innovative direct marketing using the latest approaches such as blogs, social media awareness and endorsements.
You Can’t Win the Game Unless You Are In The Game
Remember, you can sit on the sidelines and admire the big gains that the players in this market are enjoying, but to succeed you have to be in the game.
We are bullish on the sports nutrition segment of the nutritional and the supplement sector, but we like the entire business.
If SENZ were able to capture even one percent of the business that Herbalife is bringing through the door, it could be the most profitable healthcare or nutrition stock you will own this year, and for some time to come.
They appear to be moving very quickly on the right path.
USA News Group
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