Fundamental Research Corp. analyst Siddharth Rajeev recently
initiated coverage on Laguna Blends, Inc. (CSE: LAG) (Frankfurt: LB6A.F) (OTC:
LAGBF) issuing a “Buy” rating on the company’s stock on the Canadian exchange
with a price target of C$0.45 per share. The 31-page investment analysis gives
readers a comprehensive look at Laguna Blends operations, including investment
highlights and risks, financial and industry data, the company’s products and
marketing strategy, management, as well as peer comparisons.
The full report is available to subscribers here:
http://lagbf.qualitystocks.net/lagbf-frr.pdf
Laguna is a multi-level marketing (MLM) company focused on
generating sales of hemp-based functional beverage products through a network
of independent affiliates. The company currently has two products in the
market: Caffe, a hemp-infused instant coffee product; and Pro369, a water
soluble hemp protein powder. Operating as a direct selling company, Laguna’s
growth depends on its ability to attract independent sales affiliates. In March
2016, Laguna launched sales of Caffe with 135 affiliates on board; as of April,
the company had more than 700 affiliates.
In his opinion, investment analyst Rajeev cites the World
Federation of Direct Selling Associates, which reports sturdy growth in the
number of both direct sellers and correlating retail sales. In 2014 there were
99.7 million direct sellers worldwide who generated sales of $182.8 billion, up
from 84.6 million sellers in 2011 who generated $151.3 billion in sales. The
United States is the largest market, accounting for 19% of all global direct
sales.
After an extensive review of the direct sales market and the
performance of several recognizable MLM companies such as Avon (NYSE: AVP),
Herbalife (NYSE: HLF) and others, the investment report discusses Laguna Blends
CEO Stuart Gray, who founded the company in 2014.
Under his leadership, the company’s management team enhanced
the traditional direct selling model with the integration of a virtual 3D
technology platform called Laguna World, which enables independent affiliates
to recruit, train and generate sales online.
“The primary objective of the platform is to enable
affiliates to build their business from their own home, or while travelling,
replacing the need for physical meetings. The platform also allows affiliates
to record and tracks their sales, and the company to track the performance of
all of its independent consultants, and the various incentives earned.
According to Laguna, they are the only network company that utilizes such a
technology, and believes this technology is a game changer in the industry. We
were provided a virtual tour of Laguna World and witnessed the platform’s
features, which we found to be very impressive,” reads the report.
From here, Rajeev reports on the hemp market, which serves
as the basis for Laguna Blends’ products. As a viable source of protein,
omegas, fatty acids, magnesium and zinc, hemp is found in a wide array of
products, including many which are sold at large retailers such as Costco
(NASDAQ: COST) and Walmart (NYSE: WMT), reports Rajeev.
He notes that Laguna Blends’ hemp products fit within the
multi-billion dollar protein drink/sports nutrition niches of the functional
food and beverages market, which is expected to grow 25% to $54 billion by
2017, compared to 2013 figures, according to food research company Leatherhead
Research.
“Laguna’s focus is on daily consumable products and their
strategy is to develop modified versions of such products by adding unique features
and selling points … We were provided samples of both products and we found
both of them to be convenient and of good taste,” opines the analyst.
Rajeev concludes the report with a look at Laguna Blends’
product development and peers, before further discussing the company’s
management team and financial position.
“Based on our valuation models, we are initiating coverage
on Laguna with a BUY rating and a fair value estimate of $0.45 per share. The
company is expected to start reporting sales figures shortly. We believe the
value proposition and market absorption of the initial set of products will
play a key role in the company’s ability to attract affiliates,” concluded the
report.
For more information, visit www.lagunablends.com
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