Licensing is big business.
The world's largest licensors generated $272 billion in retail sales in 2016.
Brands like Disney, Warner Bros., Universal, and Hasbro are the industry heavyweights, commanding a significant share of the market.
We've recently discovered a company in an exclusive 10-year agreement with kathy ireland Worldwide, the 26th-largest licensor globally (tied with Ferrari at $2.6 billion annually).
The company, Level Brands (NYSE American: LEVB), went public through a Regulation A+ offering in November 2017. It's only the second such IPO to list and trade on the NYSE American.
As a Reg A+ offering, which raised the maximum $12 million available, it flew under the radar of much of Wall Street, which has created a compelling opportunity for investors.
Priced at $6 per share, the stock has pulled back in the months since its IPO, with shares trading near $4 in recent days.
It's mispriced opportunities like this that can create big wins for investors.
Since going public, the company reported triple-digit growth for the first quarter of fiscal 2018, with sales up an impressive 244% year-over-year. Gross profit surged 1,138% in the period.
Yet the stock has traded down.
Even if it just traded back to its IPO price, investors could see nearly 50% returns. With a regular stream of announcements of new deals, such as the company's $32 million, 10-year deal with CBD-manufacturer Isodiol, the upside could be significantly more.
Licensing Leader Kathy Ireland Serves as Chief Brand Strategist
Famed supermodel turned entrepreneur Kathy Ireland serves as Level Brands' Chairman Emeritus and Chief Brand Strategist.
Her wealth of experience gives Level Brands a strong competitive advantage and the potential for rapid growth.
Low Overhead, High Margins
As a licensing company, Level Brands is a non-capital-intensive business with very limited overhead and virtually no inventory.
Composed of a talented team focused on establishing new brand-management deals and expanding distribution for each of its four divisions, like the recently announced Riley Rose deal signed by its Beauty & Pin-Ups division, the company generates impressive margins, with gross margins expected in the 70%-80% range.
Strong Fundamentals
Thanks to a recent start and an influx of cash from its IPO, Level Brands has a strong balance sheet, with zero long-term debt and approximately $9 million in cash.
With its low overhead and high-margin business model combined with an impressive and growing list of licensing deals and distribution channels, Level Brands is well-positioned for solid growth in the quarters ahead.
The company generates a combination of upfront fees, in the form of cash or equity as well as ongoing royalties on sales for each of its licensing deals. Over time, this could easily lead to exponential growth, leading to a substantially higher valuation.
Kathy Ireland Discusses Relationship with Level Brands
Hear directly from Kathy Ireland herself as she discusses the Level Brands opportunity: https://levelbrands.com/
kathyirelandlevelbrands/
With triple-digit growth, a growing roster of licensing deals, and the support and experience of Kathy Ireland, it's only a matter of time before more investors catch wind of the Level Brands opportunity.
Those who get shares early could see a big reward in the months ahead.
Sign up for news alerts on Level Brands today to stay informed of the latest developments.
Disclosure
(Level Brands (NYSE: LEVB) is a client of RedChip Companies. LEVB agreed to pay RedChip a monthly cash fee and 5,000 shares of Rule 144 stock for four months of RedChip investor awareness services. )
