December 3, 2013
VEND Can Double From Here
Although we do not formally cover Fresh Healthy Vending International, Inc. (OTCQB – VEND - $2.08 – Not Rated), we think the story is great and the stock has the legs to double from current levels, which is why we felt compelled to introduce the story today.
Company successes have obvious traits such as operating in a large addressable market and having an identifiable differentiator or a fragmented market with no 800-pound gorillas. If you are lucky, you can hit a stock at the right time if you establish a position in the early stage of a major shift in trends that leverage the early mover advantage in its industry segment. Every once in a while these stocks sell off for a spell after reaching a peak only to run right back up again.
That is exactly what we believe will occur with Fresh Healthy Vending.
California-based Fresh Healthy Vending is a leading healthy vending franchisor that pioneered the concept of vending machines stocked with tried-and-tested fresh, healthy snack options and capitalizes on a growing market of health conscious consumers. The company has appointed more than 205 franchisees throughout the United States, Canada, Puerto Rico and the Bahamas. Fresh Healthy Vending has more than 2,300 machines installed in schools, universities, hospitals, community centers, military bases, airports, fitness facilities, YMCAs, libraries and many other types of locations.
In an effort to fight obesity and diabetes, schools and colleges around the country are replacing the traditional vending machines that offer high-sugar, high calorie, and high fat foods with those that offer healthy foods. In fact, many school systems throughout the U.S. are mandated to replace the existing installed base of products with healthier options. The problem is that many of the vending machines in the $42 billion industry are ill-equipped to truly offer healthier alternatives. As a result, the current machines must be taken out and replaced by better options.
The company offers three different machines: The Healthy Vending Combo snack and drink machine, Healthy Vending Cafe that brews gourmet hot beverages in less than 40 seconds and the brand new Healthy Vending Touch-the only 46" 3D interactive touch screen vending machine.
The company is hitting on all cylinders as outlined by a very positive news release earlier this week. Fresh Healthy Vending announced that November sales were the company’s highest monthly sales ever, highlighted by the addition of 57 new locations contracts and the first sale of the Healthy Vending Touch machine. Separately, the company also added a number of new franchisees during the month.
The stock reached a peak of $4.05 and sold off following an article on Seeking Alpha which offered a differign opinion on the stock. The good news is that the subsequent sell-off presents a great opportunity for investors to step in at an attractive price that happens to be on the heels of the solid November news released on Monday.
With the healthy replacement vending machine trend at its back, we believe that the contract sizes for the company will increase not just in number but in size as well. In our view, as additional contract, franchisee, and sales milestones are reached, VEND’s stock could reach the $5.00 level in the near term.
For more information, refer to our previous sponsored VEND Reports, Updates and Hot Topics by visiting www.GoldmanResearch.com
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Senior Analyst: Robert Goldman
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