Undervalued US
Highland (OTC:
UHLN) could be next hot stock after acquiring healthy menu
restaurant chain
Miami, FL -- March 13, 2018 --
InvestorsHub NewsWire -- EmergingGrowth.com, a leading
independent small cap media portal with an extensive history of
providing unparalleled content for the Emerging Growth markets and
companies, reports on United Highland Corp. (OTC
Pink: UHLN).
United Highland (OTC
Pink: UHLN) just announced that it acquired the
health-conscious restaurant company TRU-Food Provision Co., and
that it has brought its financials up to date, removing the “stop
sign” on OTCMarkets.com.
Here’s why US Highland Corp. (OTC Pink: UHLN), could
turn out to be a winner in the casual health food dining
space:
The $750 billion U.S. restaurant industry is coming to terms with
the fact that healthy eating is not a passing fad, but a
fundamental shift in consumer behavior that is here to stay. 70% of
U.S. consumers say they are influenced by the availability of
healthy menu items when choosing where to dine out, according to a
2017 industry report by the
National Restaurant Association. This underlines the mainstreaming
of healthy eating.
Retail sales of natural and organic food in the U.S. have been on a
steady uptrend since 2000, hitting $61.1 billion in 2017. This is a
pointer to the growing demand for healthy menus in both restaurants
and households.
Stronger growth ahead
The general analyst consensus is that demand for healthy menu
options will grow at an even more frantic pace in coming years.
Interestingly, health consciousness is not the sole driver of
demand. Economic considerations are also at play, despite the fact
that healthy meals such as salads, fresh protein and flatbread
sandwiches are priced at a premium to unhealthy options.
On closer inspection, consumers have realized that unhealthy meals,
which are typically priced at a dollar in most fast food chains,
are in the long-term more expensive than the $5 to $7 healthier
options. This is because of the economic cost of managing lifestyle
diseases, which are strongly linked to calorie-laden and
notoriously greasy dollar meals.
Lifestyle diseases are expensive to treat since the drugs are not
only exorbitantly priced by big pharma, but also need to be
purchased for the remainder of one’s life. Conditions such as
hypertension can also limit productivity at work, lowering the
overall competitiveness of the U.S. economy at a time when rival
economic powers such as China are quickly catching up. One study
indicates that lifestyle diseases cost the U.S. economy over $153 billion per year in
lost productivity.
As the economic impact of unhealthy meals becomes more apparent,
policy makers will have an even greater incentive to accelerate the
introduction of policies that promote healthy eating.
Demand for healthy menu items is therefore set to grow against the
backdrop of sustained consumer demand and an increasingly friendly
regulatory landscape.
Clearly, the U.S. healthy dining industry is coming of age. Some of
the publicly listed legacy fast food chains have in the recent past
attempted to establish a footing in the sector by adding healthy
options to their menus. None of them, however, are fully
commited to healthy eating as they offer a handful of healthy
options alongside a plethora of processed, sugary and greasy
foods.
This means that the public have limited opportunities as far as
profiting from public companies that are fully committed to healthy
dining is concerned.
In line with our established tradition of identifying undervalued
emerging growth companies and bringing them to the attention of the
investment community, EmergingGrowth.com identified one
public company that has jumped into healthy dining with both
feet.
US Highland (OTC
Pink: UHLN) has finalized agreements to
fully acquire Tru-Food Provision Co, an Atlanta, GA headquartered
fast-casual restaurant that is consolidating its position in the
healthy dining sector through rapid expansion in Atlanta and across
the south east.
The press release about the acquisition, which is already in the
public domain, indicates that Tru-Food will expand substantially
over the next 2 years, positioning UHLN as a formidable franchise
development company.
Tru-Food is a healthy dining pure play, a model UHLN’s CEO Everett
Dickson says competitively positions it in the rapidly growing
healthy eating space. He spoke to Emerging Growth at length about
the rationale behind the acquisition deal and what it means for the
company’s shareholders. Excerpts from our conversation with the CEO
will be analyzed later on in the article.
For now, the fundamental thing is to first appreciate the size of
the healthy dining market, its growth potential and the market
entry strategies work vis-à-vis those that don’t.
The healthy dining industry in the U.S. can
conservatively be valued at $525 billion (based on the fact that
70% of consumers in the $750 billion U.S. restaurant industry
prefer healthy menus).
In view of the strong growth prospects outlined earlier in the
article, the value of healthy dining as an industry could expand
exponentially from $525 billion to $1 trillion in the next couple
of years.
Consequently, there is a huge opportunity for investors to make a
decent return on investment in this space, provided they invest in
companies that are competitively positioned to corner the
market.
The real opportunity
Overall, healthy menu options have increased 30% in the Top 500
chain menus in recent years, according to the Technomic 2016 Healthy Eating
Consumer Trend Report, underlining lower supply of healthy
options vis-à-vis a 70% preference from consumers as pointed out in
the beginning of the article. This undersupply is where the
opportunity lies.
Legacy publicly listed fast food brands such as McDonald’s (NYSE:
MCD), Wendy’s (NASDAQ: WEN) and Taco Bell (owned by
Yum! Brands, NYSE: YUM) have attempted to seize the
opportunity by adding healthy options to their menus, tempting
investors in the emerging healthy dining space to add these stocks
to their watchlist.
However, investors keen on making real returns from healthy dining
should pay little attention to the moves that legacy fast food
brands are making in this space. These are primarily public
relations tactics aimed at deflecting criticism away from the
concerns consumer advocacy groups have raised about the devastating
health effects of fatty and sugary dollar meals.
The reality is that legacy fast food brand identities are already
fixed in the minds of consumers—and they are anything but healthy.
Adding healthy options to menus only serves to increase costs and
make the menus overly complex, affecting overall business
performance. MCD experienced this between 2010 and 2015 when its
healthy options provoked sustained criticism in the
financial press that its menu had lost focus and become overly
complex, a development that was negatively received by investors
and analysts. Today, MCD is more focused on its core menu options,
despite leaving a few healthy options on the menu ostensibly for
reputational reasons.
Clearly, if you are thinking of profiting from the growth potential
of the healthy dining market, you need to look beyond legacy fast
food chains that are adding healthy options to their menus.
The real opportunity for investors interested in the healthy dining
space is in emerging fast-casual restaurants that are solely
focused on healthy menus. In addition, they must have the right mix
of strategy and talent to navigate the challenges in an early stage
sector and achieve sustained growth.
The only challenge is that most of the emerging fast-casual healthy
menu restaurants are privately owned, meaning that information
about their operations, finances and strategy is scant and
investing in them is still largely restricted to private equity
firms.
To circumvent this challenge and present the public with an
opportunity to profit from the tremendous growth opportunity in
healthy dining, UHLN is giving its investors an opportunity to be
part of the growth story of Tru-Food, its recently acquired pure
play healthy dining chain store.
First of several acquisitions
“We are pleased to welcome Tru-Food to the UHLN family, as a first
of several acquisitions” said Everett Dickson, CEO of UHLN in a
press release. He described the deal as: “another partnership
that adds to our solid foundation for assets, while diversifying
our revenues streams, improving profitability and increasing
shareholder value. Tru-Food founder and senior management
believe it's in their best interest to become part of UHLN which
provides them the financial platform to substantially increase
their business over the next 24 months.”
The specifics of the deal—including additional details about
Tru-Food’s market roll out plan and timelines for executing its
strategy—will be officially disclosed to the public after the
company files an 8K with the Securities and Exchange Commission
(SEC).
“Though I can’t delve into the specifics at the moment, I can
confidently reassure our investors and the public that Tru-Food is
ran by some of the most reputable names in franchising, as they
will soon come to discover,” noted Mr. Dickson.
“In line with our vision to be the foremost franchise development
company, we are focusing on niche markets such as healthy dining
that are still in need of developing but show strong growth
potential. As such, talent is a key consideration for us when
selecting an acquisition target. We work with business leaders who
have sharp business acumen and an established track record of
outstanding performance in their respective markets. Our existing
and potential investors should expect nothing less with Tru-Food,”
he continued.
What this acquisition means
Commenting on what the acquisition means, Dickson said it gives
UHLN the opportunity to gain an early mover advantage in the
healthy dining market. “A lot of brands are lumping healthy eating
options together with unhealthy options in a single menu. Few,
however, have successfully positioned themselves as healthy eating
pure plays, despite the fact that healthy dining as a standalone
market has come of age and is ready for major investments,” said
Dickson.
By positioning itself as a pure play, Tru-Food will establish a
strong and memorable brand identity in healthy dining before the
market gets flooded with copycats. A memorable brand identity with
a clear and consistent message that resonates with the target
market is an indispensable component in the marketing strategy of
any restaurant business. Players that offer healthy menu options
alongside deep fried, calorie-laden unhealthy options are sending a
distorted brand message and making a serious strategic blunder.
Mr. Dickson reiterated the fact that Tru-Food’s clear brand message
would be championed by a seasoned management team that understands
all elements of the franchising and restaurant business—from
market-driven customer service policies; healthy diverse menus;
strategic selection of franchisees and structuring of licensing
agreements to create win-win engagements; strategic alliances with
commercial real estate players and businesses who have concepts and
properties that capture the brand ethos of healthy living;
competitive positioning of the Tru-Food brand in relation to key
competitors in the space; and structuring and negotiation of
celebrity endorsement deals that profitably communicate the brand
ethos of healthy living.
“As soon as we make necessary regulatory filings, we will proceed
with officially unveiling the senior management team at Tru-Food.
We will also expound on the specifics of our operational strategy,
which will see the Tru-Food brand rapidly expand its footprint in
Atlanta and across the South East over the next two years,” said
Mr. Dickson.
This ambitious capital-intensive expansion plan, which has a
two-year timeline, heightens the possibility that the company is
already in advanced talks with deep-pocketed investors to shore up
its coffers, preferably through equity financing—a point Mr.
Dickson said “he would authoritatively comment on further down the
road.”
“For now, what I can say is that our shareholders are thrilled
following the announcement of this deal as it candidly demonstrates
our commitment to model ourselves into a successful franchise
developer,” ventured Mr. Dickson.
The CEO joined UHLN in July 2017 after the company switched its
path from motor cycle manufacturing to franchise development.
Following this critical transition, Dickson has been proactively
identifying acquisition opportunities in order to actualize the
company’s franchise development dreams.
The deal with Tru-Food, which comes barely a year after his entry,
is a pointer to his commitment, strong professional networks in the
franchise industry, professional competence and personal
entrepreneurial grit. These are qualities that investors should
always look out for before investing in a company operating in a
dynamic and high pressure early stage field such as healthy dining.
Dickson has garnered the right momentum to seal other acquisition
deals in future, in line with his guidance that Tru-Food is the
first of many UHLN’s acquisitions. More are in the pipeline.
Conclusion
The top 50 quick-serve brands in the country rake in more than $2
million in revenue per store annually, according to a comprehensive
report by a sector analyst published by Forbes.
While it is difficult to extrapolate Tru-Food’s future revenue per
store without first assessing consumers’ initial reaction to the
concept, the brand has more than enough potential to match or
surpass the revenue per store of leading legacy brands.
This is not only because of its pure play approach to healthy
dining—which creates a memorable brand identity with a clear and
consistent message—but also because healthy meals are priced at a
premium to unhealthy meals. A healthy meal can cost 5 times as much
as an unhealthy meal in a typical fast food chain. Moreover, a
rapidly increasing number of consumers are willing to pay for this
premium in view of the health benefits and future healthcare
spending savings.
Working with the assumption that UHLN will be able to match or
surpass legacy fast food chain stores’ $2 million revenue per
store, it is possible that the company could easily exceed sales of
$10 million within the next two years of rapidly expanding its
store footprint in Atlanta and the south east.
Despite the prospect of a meteoric growth in topline exceeding $10
million in the short-to-midterm, UHLN has a modest market cap of
around $0.5 million. The coming weeks
and months present a rare opportunity for savvy investors to get in
at ground zero and accumulate a stock that could end up being the
next hot stock that outperforms the market by a double digit
multiple purely on fundamentals.
Other Companies in the news and featured on
EmergingGrowth.com
One World Ventures, Inc.
Stop sign Company One World Ventures, Inc. (OTC:
OWVI), almost literally began to trade three sessions ago at
.0001 per share before skyrocketing 1,300% on over ½ million
dollars in dollar volume. There has been no news or financial
reporting disclosure on OTC markets since 2012. Those who
were in the know, and made a decent profit, congratulations.
However, with nothing new as far as fundamentals on the chopping
block, it’s high risk to hold.
Have a look at United Highland Corp.
(OTC
Pink: UHLN) who just completed an acquisition and got current
on its filings with the SEC.
IGENE Biotechnology, Inc.
Another stop sign company with a similar run to One World Ventures
is IGENE Biotechnology, Inc. (OTC:
IGNE). IGENE is another one with no news, nor financial
disclosure filed with OTC Markets in quite some time, but that did
not stop shares from topping 1,500% in gains before giving back
some at the close yesterday. Candlesticks are indicating
bearish for the open, as the trend broke the upper level of the
Bollinger Band on the down side.
Guided Therapeutics, Inc.
Unlike the previous two companies mentioned, Guided Therapeutics,
Inc. (OTCQB:
GTHP) actually released some fundamentals yesterday causing the
run from .0058 - .0147. This wa on news discussing regulatory
approval for the sale in India.
In the meantime, have a look at
United Highland Corp. (OTC
Pink: UHLN) – Stop sign gone, acquisition completed, this one
could do very well.
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