In terms of businesses, it really doesn’t get more boring than Jamieson Wellness (TSX:JWEL) and its business within the vitamins, minerals, and supplements (VMS) space. That’s a huge reason why the company’s IPO was fairly quiet a few years back, with many Canadian investors to this day who remain unaware that Canada’s “ruler of the medicine cabinet” has a publicly traded stock on the TSX.
For disciples of Warren Buffett (Buffettarians), we know that boring is beautiful. And Jamieson could be seen as a staple business that the Oracle of Omaha himself could own if he’d shown a greater affinity for Canadian stocks.
The VMS business is very competitive, so Jamieson needs a distinct advantage to rise above the pack to be what Buffett would deem as a “wonderful business.”
While it may seem like any startup firm or shady multi-level marketer (MLM) down the street can make their own vitamin overnight, I believe no new entrant will ever be able to compete with the likes of Jamieson and its iconic brand that’s been built over the course of a century. Jamieson has been “ruling” Canadian medicine cabinets for generations, and that’s brand power that money really can’t buy.
The company has maintained a sound reputation for a ridiculously lengthy amount of time, and as a result, Jamieson is not only a household name in Canada; it’s a top foreign brand in the booming Chinese market — a huge growth market for Jamieson moving forward.
Why?
It all comes down to trust. In a time where competing firms are adding “filler” to their products to lower expenses and drive up gross margins, consumers need a name they can rely on when it comes to something as critical as their health. If you’ve got a vitamin D deficiency, as many Canadians have, you want to be sure you’re getting the quantities of vitamin that’s on the label, and not a fraction of it.
Jamieson bottles up a lot more than what’s on the label.
You’re getting the assurance of impeccable quality, and a higher degree of precision when it comes to the labelled quantities. It’s the trust that in the brand that allows the green-capped bottles to command a hefty premium over competing products. And as Jamieson continues to launch new products while moving into the red-hot Chinese market, Jamieson stock could be ready to take off in 2019.
Core domestic products clocked in an impressive 10.2% in year-over-year growth for the third quarter. Marketing campaigns have clearly allowed Jamieson to take share over its competitors. And with more Canadians on the Jamieson bandwagon, new product launches could be like rocket fuel for the company’s top line moving forward. Add product launches in China into the equation, and I think Jamieson could easily surge 50% by year end.
The stock trades at $21 and change at the time of writing, and with the stock flat-lining since the “malnourished” third quarter, I think now is an opportune time to pounce on shares before they correct upwards.
Stay hungry. Stay Foolish.
