Jamieson Wellness Inc.’s Revenue Tops $300 Million in 2017: Time to Buy?

Jamieson Wellness Inc. (TSX:JWEL) watched its stock fall 0.77% on Friday following its Q4 2017 earnings release. What should you do now?

| More on:
The Motley Fool

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Jamieson Wellness Inc. (TSX:JWEL), one of the world’s leading manufacturers and marketers of sports nutrition products and specialty supplements, announced its fiscal 2017 fourth-quarter and full-year earnings results after the market closed on Thursday, and its stock responded by falling 0.77% in Friday’s trading session. Let’s break down the results and the fundamentals of its stock to determine if we should be long-term buyers today.

Breaking down the earnings report

Here’s a quick breakdown of 10 of the most notable statistics from Jamieson’s three-month period ended December 31, 2017, compared with the same period in 2016:

Metric Q4 2017 Q4 2016 Change
Jamieson Brands revenues $65.55 million $55.19 million 18.8%
Strategic Partners and Eliminations revenues $18.77 million $10.51 million 78.7%
Total revenues $84.32 million $65.70 million 28.3%
Gross profit $30.90 million $23.70 million 30.3%
Gross margin 36.6% 36.1% +50 basis points
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) $18.85 million $14.73 million 28.0%
Adjusted EBITDA margin 22.4% 22.4% Unchanged
Adjusted net income $9.75 million $5.10 million 91.1%
Adjusted diluted earnings per share (EPS) $0.25 $0.13 92.3%
Cash flows from operating activities $17.55 million $12.64 million 38.8%

And here’s a quick breakdown of 10 notable statistics from Jamieson’s 12-month period ended December 31, 2017, compared with the same period in 2016:

Metric Fiscal 2017 Fiscal 2016 Change
Jamieson Brands revenues $237.00 million $192.50 million 23.1%
Strategic Partners and Eliminations revenues $63.62 million $55.84 million 13.9%
Total revenues $300.62 million $248.33 million 21.1%
Gross profit $104.85 million $80.81 million 29.7%
Gross margin 34.9% 32.5% +240 basis points
Adjusted EBITDA $61.48 million $46.79 million 31.4%
Adjusted EBITDA margin 20.5% 18.8% +170 basis points
Adjusted net income $27.58 million $10.91 million 152.8%
Adjusted diluted EPS $0.70 $0.28 150.0%
Total assets $512.56 million $405.18 million 26.5%

Outlook on the year ahead

In the press release, Jamieson provided its outlook on fiscal 2018, calling for the following results:

  • Revenue in the range of $325-335 million, representing growth of 8-12% from 2017
  • Adjusted EBITDA in the range of $67-69 million, representing growth of 9-13% from 2017
  • Adjusted diluted EPS in the range of $0.83-0.87, representing growth of 18-25% from 2017

What should you do with the stock now?

The fourth quarter capped off a phenomenal year for Jamieson, and its outlook calls for very strong growth in 2018, so I think its stock should have responded by rallying on Friday; that being said, I would buy the stock today for one fundamental reason in particular: it’s undervalued based on its growth. Jamieson’s stock currently trades at 29.4 times fiscal 2017’s adjusted diluted EPS of $0.70, which seems fair, but it trades at just 24.2 times the median of its adjusted diluted EPS outlook of $0.83-0.87 for fiscal 2018, which is inexpensive given its current double-digit percentage earnings-growth rate and its long-term growth potential.

It’s also worth noting that Jamieson pays a quarterly dividend of $0.08 per share, representing $0.32 per share on an annualized basis, which gives it a respectable 1.6% yield. Any dividend is great for a high-growth stock like Jamieson, and the best way to utilize it is to make sure your investment account is set to have all dividends reinvested (with a DRIP program).

With all of the information provided above in mind, I think all Foolish investors should consider initiating small positions in Jamieson Wellness today with the intention of adding to those positions on any significant pullback in the future.

Should you invest $1,000 in Jamieson Wellness right now?

Before you buy stock in Jamieson Wellness, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Jamieson Wellness wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any of the stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

dividends grow over time
Stocks for Beginners

The Top Canadian Stocks to Buy Right Away With $4,000

If you only have $4,000 to invest, then these Canadian stocks are some of the best options out there.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

Asset Management
Investing

2 Canadian Value Stocks I’d Buy Now and Hold for a Lifetime

Here are two cheap Canadian stocks investors can buy and hold for outsized gains in 2025 and beyond.

Read more »

tsx today
Stock Market

TSX Today: Why Canadian Stocks Could Fall on Thursday, April 3

TSX stocks may come under pressure today as sharp commodity declines and Trump’s sweeping new tariffs spark fresh concerns over…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Retirement

Here’s the Average Canadian TFSA and RRSP at Age 60

Many Canadian retirees have tens of thousands invested in ETFs like the iShares S&P/TSX 60 Index Fund (TSX:XIU).

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »