Sentient Brands’ (OTC Pink: SNBH, $SNBH) stock has been volatile. But few will argue that it’s not gained the attention of investors wanting exposure to the opportunities presented by the $115 billion luxury skincare market. The past three weeks of trading have seen volume and prices surge, trading 347% higher intraday in March and then settling 87% higher to close the action-packed session. But the interest didn’t end there.
SNBH shares continue to attract investor attention, and share prices have reacted favorably to news about its Oeuvre CBD and gemstone-infused luxury skincare products. And while share prices have slid in recent sessions, it’s likely a result of broader market weakness sending small and micro-cap stocks appreciably lower. However, the consolidation is not necessarily bad news for investors who want a better entry price or those wishing to cost average. At current prices, the path of least resistance should be to the upside. And for good reasons.
Sentients Brands’ has been on a mission to take its Oeuvre CBD and gemstone-infused luxury skincare products to a market constantly begging for better skincare products. And the prize they are targeting? A massive $115 billion luxury skincare market that is expected to grow by 25% a year for the next five years. But SNBH isn’t necessarily playing for the entire market. While the hundreds of billions are always in play, SNBH believes it can successfully fill a niche opportunity from its CBD and gemstone-infused lineup, which places them into a more than $3.4 billion revenue-generating market opportunity.
Reaching into both markets would indeed increase the potential. But, even staying focused on the niche opportunity could return enough sales to turn this micro-cap luxury skincare products maker into a revenue-generating juggernaut. That’s indeed the intent of a management team that knows the industry well.
But more than knowing the sector, they know the players. And those relationships could be instrumental in potentially making a deal in a beauty market in consolidation mode.
Video Link: https://www.youtube.com/embed/qU9zij5nRdU
Luxury Skincare Brands Want More
Those deals are happening fast. And one could come Sentient Brands’ way as the beauty industry becomes increasingly focused on acquiring products instead of developing them. Of course, that makes sense. Acquiring already marketed and innovative products is the quickest way to make an acquisition accretive. That’s no secret to sector giants such as L’Oréal ($OR.PA), Estée Lauder ($EL), and Procter & Gamble ($PG), which have been active in the market to acquire niche assets that can add significant new revenues and fend off competitive threats. But it’s not only those big three looking to get bigger.
Smaller, multi-million dollar brands also want to grow and are also looking for ways to expedite getting more and better products to market. For $SNBH, they may very well be in a sweet spot of opportunity.
Part of that reason is that its Oeuvre line is potentially creating and developing a new market segment by utilizing properties in its Oeuvre line unique to everything on the market. Specifically, its combined CBD and gemstone properties are in focus. Better said, in fashion.
And that differentiator is more than attracting customers; it’s likely attracting attention from potential suitors. Remember, in a market share game, a single point can be worth millions. So, expect consolidation to remain a proactive instead of reactive gesture. And for SNBH, which is getting its name known, that could be excellent news. But here’s the best part of the opportunities at hand- SNBH has a world-class executive team that knows how to develop brands and get deals done.
World-Class Management Team
In fact, the team at Sentient Brands has a history of high-profile successes, working with global brands like Hugo Boss, Victoria’s Secret, Versace, and Bath & Body Works, where they contributed to product development and marketing.
It’s a combined level of experience worthy of a blue-chip name, and SNBH investors should appreciate the value they bring to the company. And they bring more than experience; they bring connections. The ones through CEO George Furlan could be the most valuable. Investors reading between the lines of his arrival may have been responsible for the recent surge in trading activity, noting that his worth is considerable.
Furlan previously provided creative, strategic, and operational support to lifestyle companies such as Fleur du Mal, Raleigh Denim Post-Imperial, and Tommy Hilfiger. While excellent for them at the time, the better news is that he is now dedicated to driving SNBH’s shareholder value higher by commercializing its own innovative product lines. Knowing that industry experience combined with brand power is a formula for success, investors appear to be taking proper notice by catching SNBH shares at undervalued levels. There should be more bullish days to come.
Expect that as a result of SNBH having the product and knowing how to penetrate a multi-billion-dollar market opportunity. Moreover, with Oeuvre, don’t expect them to be intimidated by any brand. Oeuvre can go side by side with the best of products, and because it’s different, it could emerge as a user favorite.
And that’s potentially excellent news, with Oeuvre targeting a CBD-infused beauty product space that continues to grow at least 25% per year. And by adding a gemstone component to the formulation, they not only stand out in a crowd but become innovators in an industry bent on new product discovery and innovation. Hence, like SNBH, Oeuvre is in the right place at the right time.
Right Product, Right Time
But more than that, Oeuvre is proving itself as a best-in-class CBD-infused product, engaging audiences already receptive to CBD’s proven effectiveness. Moreover, Sentient’s most extensive marketing campaign ever should do well to introduce the brand to considerably more consumers and drive revenues higher quickly, especially with the product leveraging its first-to-market position in a developing segment.
That result could happen faster than many think. Oeuvre’s CBD and gemstone-infused beauty products are inventive and socially conscious, meeting criteria that appeal to its target market and differentiate itself from earlier competitors. Best of all, as it finds its space within a beauty industry in consolidation mode, earning market share could do more than drive revenues higher; it would likely attract interest from potential suitors. Why?
Because the behemoths in the sector don’t take well to losing market share. In fact, they tend to respond quickly to stop the loss, which could put SNBH’s Oeuvre into the sights of industry giants like L’Oréal, Estée Lauder, and Procter & Gamble. Remember, these companies continually look to develop or acquire new brands that can give them a quick and competitive advantage in emerging markets. It’s a strategy that makes sense. After all, acquiring successful products mitigates risk, lowers marketing costs, and hurdles many barriers to entry that often squeeze small brands out. It’s the quickest way to take advantage of market opportunities.
For both SNBH and a potential acquirer, the best part of that consideration is that Sentient Brands’ Oeuvre is creating a new product category, generating income, and meeting socially conscious expectations with environmentally friendly manufacturing processes. That could be why SNBH’s share price and volume have been trending sharply higher in recent weeks. Investors may very well be positioning ahead of expected news.
A $500 Million Luxury Skincare Market Opportunity
That’s a potentially wise and timely move. Even on its own, SNBH can do well by staying focused on a billion-dollar market proposition in hyper-growth mode. Women in the United States spend an estimated average of $313 per month on beauty products, contributing to the $511 billion worldwide beauty market in 2021. While the market is already massive, it is predicted to grow as high as $716.6 billion within the next three years. So, even if acquisitions were not in the near-term cards, SNBH is still ideally positioned to aggressively attack a market that could exponentially increase revenues.
And with an expected double-digit percentage compound annual growth rate in the digitally-focused markets, the revenue-generating opportunities get even better, with the sector possibly offering a trillion-dollar market opportunity by the end of the decade. Thus, those selling into the proper digital channels, like SNBH, may benefit faster than others. Undoubtedly, that’s SNBH’s intent.
Thus, SNBH doesn’t need to rely on a potential acquisition to drive growth. They can achieve its goals organically with Oeuvre positioned as the first known luxury skincare product that combines CBD and gemstone properties to provide industry-leading results. The combination helps SNBH target a specialized luxury market, the driving force behind the SNBH opportunity.
In addition, the successful marketing of Oeuvre provides a runway to evaluate strategic opportunities. Best of all, whether through acquisition or organic growth, Oeuvre is a value creator that could fuel an almost exponential rise in share price. In an e-commerce market expected to deliver a CAGR of 27.4%, that proposition is indeed in play.
Targeting A Lucrative And Proven Opportunity
Actually, it’s a plan in action. Sentient Brands kicked off 2022 with a marketing campaign focused on forming partnerships with popular influencers on social media platforms such as Instagram, Facebook ($FB), and Pinterest. The campaign’s design conveys that Oeuvre is more than dedicated to creating high-end products entirely through sustainable methods; it also delivers best-in-class results.
Oeuvre’s skincare products are free of toxins, irritants, and undesirable additives like sulfates and petroleum. Furthermore, Oeuvre does not utilize animal testing and is produced cruelty-free. They say it themselves…” Sentient Brands’ objective is to go above and beyond industry standards by ethically and responsibly sourcing all of its skincare components to meet the need for environmentally friendly, ethical, and high-quality products.”
Indeed, the message sent is one that markets and product users are eager to hear. And better yet, it’s one that SNBH is delivering.
Looking Ahead For A 2022 Breakout
So, does the sum of its parts make SNBH a compelling investment consideration? The total of those parts suggests they absolutely do. Moreover, if SNBH reaches or surpasses its guidance, share prices today are more than attractive; they present a value opportunity too good to ignore.
The best part of that calculation is that Sentient Brands has the team, the assets, and the foundation to achieve the targeted results. Thus, while 2021 set the stage for growth, 2022 can be transformational. And with milestones reached expected to become catalysts, trading ahead of news may deliver exponential gains from current levels. Indeed, something is in play at SNBH, and with volume often preceding price, those “somethings” are likely bullish to the SNBH proposition.
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