Sentient Brands’ (OTC Pink: SNBH) Oeuvre CBD and gemstone-infused luxury skincare products are attracting attention. So much so that its stock has rallied on a considerable spike in volume. But, better still, competitors may also be eyeing just how lucrative the $SNBH asset can be in a more than $115 billion market. Both situations are excellent news for investors. And while the stock has been volatile, the surge in volume and price indicates that Sentient Brands stock’s near and long-term prognosis is to move higher. That’s not irrational exuberance; it’s an expectation based on SNBH’s niche focus and the fact that, in most cases, volume precedes price.
But just because the sector is rolling up assets doesn’t mean every company will benefit. As always, innovation matters, and that plays into the strengths of SNBH. In fact, its Oeuvre line of products is so innovative it just could attract the attention of behemoths like L’Oréal ($OR.PA), Estée Lauder ($EL), and Procter & Gamble ($PG). They know that creating new categories can be the difference between growth and stagnation in an uber-competitive landscape. Obviously, with billions spent each year on new product development and marketing, any shortcut they can find to carving out the lion’s share of a niche market is a compelling proposition. And knowing that could be the reason for SNBH stock surging by 273% intraday in March on volume that has significantly exceeded its average pace.
Indeed, something’s up at Sentient Brands. And with volume generally preceding a significant price move, the apparent consideration is that it’s a bullish proposal.
Connecting The Business Dots
Connecting the business dots supports that premise. Sentient Brands has assembled an impressive management team, developed an innovative product line, and started an aggressive marketing campaign to introduce its Oeuvre luxury skincare product lineup to a massive and targeted consumer audience. Most important to those milestones is that its executive team has vast experience getting products to market, with prior history of helping to build world-class brands such as Hugo Boss, Victoria’s Secret, Versace, and Bath & Body Works. That matters.
And with industry brand development veteran George Furlan at the helm, he may do the same for SNBH. Those unfamiliar with Furlan should know that he provided creative, strategic, and operational support to fashion and lifestyle companies, including Fleur du Mal and Raleigh Denim Post-Imperial, and guided a successful global launch for Tommy Hilfiger. In addition, he contributed to relaunching the Hugo Boss luxury division and directed its sales for the Americas. As if that wasn’t enough to suggest that SNBH is in excellent hands, he also acted as a former director of sales and merchandising for Versace, where he led sales, merchandising, and marketing efforts for their US and Canadian markets. Now focused entirely on creating value from his Sentient assets, history exposes this- SNBH stock may be appreciably undervalued.
The more excellent news is that he has assembled an expert team to change that disconnect. SNBH’s Chief Brand & Innovation Officer, James Mansour, also has a proven history of developing and scaling world-class consumer lifestyle brands. He contributed to creating brands that have become billion-dollar revenue-generating icons in their respective sectors, including working with Victoria’s Secret and Bath & Body Works. Not only that, he helped create award-winning work for 3M, DuPont Corian, and other global business powerhouses, and if all goes as planned, similar results will happen at SNBH.
The rest of the executive team is just as impressive on the credentials front, and having their combined power and influence can take this current $0.20 stock and transform it into a revenue-generating juggernaut. For those thinking that sentiment is too aggressive, think again. By all measures, SNBH is doing the right things in the right markets at the right time.
Being Timely Matters; Sentient Brands Is
More importantly, they have the right products to penetrate a multi-billion dollar global prestige beauty and personal care market opportunity. And not only do they have a compelling brand portfolio, but it’s unique. More directly, the competitive landscape for their niche may be virtually untapped, and its products are a welcome change to the beauty products landscape. IIn fact, Oeuvre’s innovative, socially conscious CBD and gemstone-infused beauty products are different from anything else in the space. Of course, that’s why things could get interesting.
Why? Because a flurry of deals has made the sector more compact, with industry leaders like L’Oréal, Estée Lauder, and Procter & Gamble taking a page from the Big Pharma playbook and acquiring instead of developing. It’s less expensive, comes with much less market risk, and acquisitions get a running start to market by capitalizing on an established market presence. How can that scenario benefit Sentient Brands? It’s an easy answer. They have cleared the hurdles that other products might face by checking all the right boxes to attract interest, including having revenues, marketed products, a socially conscious manufacturing process, and an innovative, perhaps first-to-market position.
Undoubtedly, investors can do well whether SNBH markets alone, through partnership, or even by selling the brand. In fact, any deal likely puts a run back toward 52-week highs of roughly one dollar in the crosshairs, which puts a more than 525% potential return in play.
A Half-Trillion Market Opportunity
That’s not an unreachable number to be tossing around. Women spend roughly $313 per month on beauty products in the US, contributing to a global beauty market valued at $511 billion in 2021. But while the market is enormous now, by 2025, it’s expected to eclipse a more than $716.6 billion opportunity. Extrapolate less than a decade letter, the sector could be a trillion-dollar market.
As remarkable as that sounds, reports indicate that’s the trend. Moreover, it’s a market where shelf space still rules, a reason why SNBH products are attracting attention. And don’t be misled into thinking that Sentient’s digital presence keeps competitive shelf space safe. It doesn’t. Products that remain on shelves resulting from competitors’ success selling into digital channels are just as bad as losing space. Many retail chains require buybacks from vendors. Thus, products that don’t sell not only cost money, but their stagnation can also weaken a brand image. But, bad news for them is great news for companies with better products. SNBH included.
Interest from several directions could come quickly from Oeuvre being the first and only luxury skincare product infusing CBD and gemstone properties to deliver industry-best skincare for its users. Notably, the Oeuvre lineup is more than a fancy and effective combination of ingredients; it’s created a new luxury skincare niche market to exploit. Of course, that’s the premise driving the SNBH value proposition, and it’s another case where being different is good and being better adds a premium. Leveraging both is where Sentient and its investors could bank.
Here’s the better news, Sentient Brands can do well going it alone. So, the value proposition isn’t exclusively an acquisition play. Still, based on history, this management team is likely weighing its options carefully and maximizing revenue-generating opportunities before considering any third-party deal. Trading interest suggests something is happening behind the scenes. So, whether SNBH creates value by capitalizing on self-supported market opportunities or through partnerships, the path of least resistance for its shares appears to be to the considerable upside in the near and long term.
Taking Oeuvre To Next Level
That makes sense. After all, SNBH has an innovative, first-in-class product in Oeuvre to facilitate appreciation. Add an industry-best management team powering an effective marketing campaign; those results can come faster than many think. Remember, SNBH is timely to its opportunities, launching Oeuvre into a CBD-infused skincare market expected to surpass a $3.4 billion segmented revenue-generating opportunity by 2026. But that’s not where it stops.
With an expected CAGR of 25% in the CBD-infused sector during that same period, those market values double. For SNBH, however, the stakes can be even better. The e-commerce market is expected to deliver an even higher growth rate, with estimates expecting a CAGR of 27.4% during the forecast period. Notably, that’s where SNBH is primarily focused, placing them in the right place at the right time. Again.
Also notable to the value thesis is that in addition to the luxury skincare market’s growth, consumers’ spending habits are changing, purchasing more than ever through high-margin digital channels. For SNBH, that trend fits ideally into its sales strategy and takes advantage of its leadership strength of knowing what, when, where, and how to sell through those channels.
It’s essential to remember that not all companies understand the intricacies of selling outside of brick and mortar. And just because the CBD-infused skincare market is in a boom cycle doesn’t mean every company will score millions in revenues.
Most won’t even get any traction. It takes more than a fancy website to exploit a competitive market; it takes an infrastructure, including intelligent management and technological sophistication, to support growth. Those that don’t have that combination, especially when in a state of hyper-growth, often can’t survive the growing pains. Measured and managed development wins the race, and getting to the top by connecting the appropriate business dots is a better way to make sure that standing holds.
Of course, those following the SNBH story know that’s its intent. Grow efficiently, focusing on generating high-margin revenues that fall quickly to its bottom line. The first step- maximize revenues. And with multiple revenue-generating products capitalizing on opportunities in the exploding CBD-infused skincare products market and the highly profitable luxury beauty products segment, those can ramp up at an appreciable pace. SNBH guidance indicates that may be the case.
Revenues Through Target Marketing
And they can accomplish that mission by continuing to do what they do best: develop brands that resonate with an audience of engaged consumers and leverage that engagement with cutting-edge, data-driven marketing to build branding, reputation, and market penetration. By the way, that’s what they’re doing.
Social media included. Sentient Brands started 2022 with its most ambitious marketing program ever, initiating relationships with popular social media influencers on Instagram, Facebook ($FB), and Pinterest. More than using popular luxury lifestyle influencers, though, SNBH created a message that reaches its demographically-defined consumers through other popular platforms that highlight the brand’s use of high-end, sustainable products. It’s a message that makes a statement.
More importantly, there’s an intent to get an appreciable ROI on those dollars spent, which comes through robust analysis of backend analytics to keep their campaigns targeted. In other words, SNBH isn’t spending recklessly and instead always knows who they’re talking to. Of course, that’s important to permit SNBH management to adjust and optimize its strategy at a moment’s notice, keeping its target market in the conversation. Although it sounds like basic marketing, when exploited to its maximum cost-effective potential, the results culminate in utilizing people and technology to their full effectiveness.
What is SNBH hoping to get for its efforts? Put simply, their best operating year ever. And with Sentient having the team, product, marketing, and capital to accelerate that mission, it’s an ambition likely to turn into reality.
Socially Responsible In Every Way
Here’s another accelerator worth noting, and it’s why Oeuvre is earning consumer attention. Oeuvre’s skincare products are free of toxins, irritants, and other objectionable additives like sulfates and petroleum. Additionally, their production processes are vegan and cruelty-free. As a matter of fact, it’s Sentient Brands’ mission to rise above and beyond these standards by ethically and responsibly sourcing all of its skincare components to satisfy the demand for sustainable and ethical products. It’s a message the markets want to hear.
More importantly, it’s one SNBH and Oeuvre are delivering. But, the message isn’t just a timely catch-phrase; it’s part of its fundamental mission. A deliberate goal of Sentient is to stay committed to producing a line of products that define high-end CBD-infused skincare engineered responsibly to appeal to the markets that will be most resonant with this message. By the way, doing that earns the attention of millions who are watching and listening.
Don’t underestimate the importance of that attention to grow sales. It’s a distinction in a market where hundreds of skincare brands are low-quality, non-eco-friendly, or weakly branded. Sentient Brands is on the other side of the spectrum- different, socially conscious, and better. More importantly, checking all the right boxes enable Sentient Brands to emerge from a crowded, competitive landscape and earn a considerable share of a CBD-infused product’s market in its infancy.
Better yet, by bringing to market a new generation of products utilizing properties inherent to CBD and gemstone infusion, SNBH could do more than earn an impressive market share; they could attract a partner or suitor. If that’s the case, look out above; shares will rally.
Sentient Brands Is Ready To Surge
Saying that SNBH is in its best operating position ever is a spot-on assessment. They have a stellar management team, compelling products, a targeted niche, and the capital to move the revenue-generating ball forward. Obviously, the trading action over the past three weeks is an indication that management’s plan to make the company bigger faster is working, and investors are simply connecting the dots.
And by doing so, a sum of its parts is exposed that, when intrinsics catch up to share price, could send prices exponentially higher. Factor in expansion in North and South America; those current valuations deserve a multiple. Thus, although Sentient Brands’ shares have been in play, expect much more to come. Further, while the ride may not be straight up, weakness should present more of an opportunity than a scare.
Indeed, the groundwork done by SNBH over the past few months should start to pay off in revenue growth in the current and coming quarters. Investment consideration ahead of those milestones is therefore timely and warranted.
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