With the NASDAQ markets trading decidedly bearish for the past two weeks, it's more important ever to find stocks that are likely to rally from near-term catalysts. Gourmet Provisions International Corp (OTC: GMPR) is one to watch. Despite moving lower with others in its sector, GMPR has been showing pockets of bullishness with intraday swings higher of 10%-12% for the past few trading days. While the closing price gets the most attention, it's important to recognize the impact of intraday trading. For GMPR, trading shows weakening resistance at the $0.06 level, and with a breakthrough there, the stock could see meaningful appreciation.
Indeed, GMPR is following the general market trend. Even tremendous growth companies like Chewy (NASDAQ: CHWY), Fiverr (NASDAQ: FVRR), and Tesla (NASDAQ: TSLA) are getting hammered by investors taking money off the table. However, while popular financial shows may lead the novice to believe that these stocks have seen their day, experienced traders take every opportunity to load shares at these depressed levels. That's because no matter what the headlines say on any given day, markets will always pay a premium for growth. Thus, GMPR deserves its share of attention.
And with several near-term catalysts in play, investors may be wise to grab shares at these undervalued prices.
Pizza Fusion Inks $675,000 Deal
The excellent news for GMPR is that going forward, they are in the right sector at the right time. Indeed, the pandemic created massive logistical headwinds that choked off supply chains, led to product shortages, and disrupted daily operations in every way within the food and hospitality industry. Finally, after nearly 18 months of hardship, the hospitality industry is starting to bounce back. And analysts are predicting that a snap-back rally for companies in the sector could be fast and furious.
Gourmet Provisions International Corp will likely be included. And deservedly so. The company recently announced a high-margin deal from its Pizza Fusion subsidiary, expected to deliver upwards of $675,000 in the coming weeks. That deal is likely the first of several to come during the back half of the year. Moreover, that deal represents the first of several more expected catalysts from its other operating subsidiaries. Better still, a celebrity-partnered agreement later this year could be transformative for GMPR.
Notably, GMPR shares have held up pretty well comparably. Breaking from peer stocks that are trading at near 52-week lows, GMPR has held the midpoint between its 52-week high and low. And with value-creating deals front and center, the expectation is for the stock to grab bullish traction in the coming days and weeks. Again, markets pay a premium for growth.
Moreover, near-term catalysts could change the trajectory of its entire business model, with revenues from its launch of a celebrity-partnered pancake and syrup product, an expansion of its subsidiary company ownership, and enhancing a licensing agreement with Christopher Street Products having the ability to feed its aggressive acquisition strategy.
Keep in mind, too, that depression-level weakness in the sector has created enormous opportunities for consolidation and partnerships. Gourmet Provisions management, having successfully navigated the economic challenges, appear ready to pounce on accretive acquisition opportunities. And everything from property to brand acquisition is up for grabs.
Evolution Of A Brand
Gourmet Provisions may trade at the $0.05 level, but don't let that price mislead you. GMPR has an impressive history of growth. Starting as a three-store pizza business, GMPR has transformed itself into a company with multiple shots at revenue-generating goals through four wholly-owned subsidiaries. And by making moves to strengthen itself in a time of market weakness, GMPR is positioned to capitalize on a strengthening economy that should benefit each part of its operations.
Better still, for GMPR, gains in revenue generally translate to growth in share price. And with a management team that can take advantage of an opportunity, investors can expect news that is bullish toward increasing shareholder value. GMPR, by the way, built a team that can make that happen.
In fact, to earn back the value lost during the COVID-19 slowdown, GMPR added industry veteran Jack Brewer from Brewer Media Group as a Brand Ambassador. His added expertise is expected to accelerate an ambitious business plan that is already benefiting from asset-enhancement efforts initiated earlier this year. In fact, strategic moves made in Q1 set the stage for strong performance during the back half of the year.
The great news is that GMPR is already experiencing revenue-generating results from strategies that drive online sales and maximize market opportunities from its product pipeline. Also pushing sales higher is a more substantial social media presence and a determined commitment to capitalize on strategic acquisition opportunities. Comparing quarterly results and guidance, it can be argued that GMPR is in its best operating position ever. And if the team keeps its plans on course, the remainder of 2021 could blaze a trail back toward all-time highs.
In fact, GMPR has positioned itself ideally to 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 and ownership agreement with Christopher Street Products also adds intrinsic value that the markets have not yet priced in. On a sum of the parts calculus alone, current share prices undervalue GMPR assets substantially. And after factoring in its Pizza Fusion subsidiary deal that will generate upwards of $675,000 in high margin revenues in the coming weeks, that disconnect between price and portfolio is exposed even more.
And there is more value to consider.
A Potentially Transformative Deal
What could be the crown jewel in its Q2 performance is the expected product launch and partnership with a New York Times Best-Selling author & comedian. Like other celebrity partnerships, this one too has the potential to drive enormous revenue growth. Although management has kept the partner's name under wraps, markets know that the deal is with a "well-known" personality and involves bringing to market a gourmet line of "celebrity-branded" food products starting with his personal line of pancake mix & syrup. That deal can have an immediate impact.
First, it adds an additional revenue-generating product to its asset portfolio. Perhaps more importantly, though, the announcement of its launch should be a catalyst for the stock to move higher in and of itself. If the name is as big as many believe, that move can be substantial. By the way, other celebrity products that got their start from a celebrity launch include Ciroc Vodka, Patron Tequila, and Casamigos tequila. All generated billions in sales.
Don't believe that history can't repeat in this case, either. Gourmet Provisions has done the legwork by working the past six months to develop, with its partner and New Hope Mills, what they believe will be a leading custom line of Gourmet Pancake Mix & Maple Syrup. Keep this in mind, too. According to Statista Research, more than 272.72 million Americans used pancake and table syrup in 2020. That's considerably more than those that purchased vodka or tequila.
Even better, GMPR has its marketing plan in place and works closely with Parlor City Box Company to finalize a custom private labeled package that can leverage both the quality and the name associated with the products. GMPR expects the products will provide an exponential boost to sales.
Clearing Hurdles For Share price Appreciation
The better news is that those revenues will be met with a substantially improved capital structure. Investors cheered the Authorized Share reduction from 3 billion to 300 million. Currently, GMPR has only about 75 million shares issued and outstanding. More good news is that GMPR announced executing Lock-Up agreements with their noteholders, limiting each to convert a total of only eight million common shares until August 31, 2021. That agreement should take pressure off the stock in the near term.
More importantly, with GMPR advancing plans to uplist to the NASDAQ markets, the lock-up agreement 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 an uplist.
Thus, GMPR's balance sheet improvements, standstill agreements, product deals, and a strengthening economy can combine to make the remainder of 2021 a potentially robust period of growth for the company. Indeed, the convergence of these value-creating events couldn't have come at a better time.
The value proposition speaks for itself. Gourmet Provisions has a friendly lock-up on noteholders to limit dilution, reduced its authorized share count, and has only about 75 million shares outstanding. Even better, GMPR posted a strong Q3 that delivered $233 in profit, inked a $675,000 Pizza Fusion deal that should provide revenues in the coming weeks, and is preparing to launch a celebrity-partnered product that could generate millions in new revenues. And while that's a lot to digest, management has guided for more to come.
Thus, if shareholder value is earned, expect GMPR's to grow substantially throughout 2021 from deals already in place. Taking that a step further, if its pancake and syrup deal gains the sales traction expected, returns from current levels could be exponential.
Indeed, investing ahead of catalysts can be extremely rewarding.
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