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    Fresh Healthy Vending International, Inc. (VEND) – OTC BB  October 22, 2014


    Business Model

    Fresh Healthy Vending, based in San Diego, California, is North America’s leading healthy vending franchisor. Fresh
    Healthy Vending 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. It has more than 185 active franchisees
    throughout the United States, Canada, Puerto Rico and the Bahamas, and actively looks to partner with like-minded
    entrepreneurs who share its vision. The Company offers three different vending options: the Healthy Vending Combo
    snack and drink machine, the Healthy Vending Touch - a 46” 3D interactive touch screen vending machine, and the
    Fresh Micro Market. The Company has booked over 2,300 machines for placement in schools, universities, hospitals,
    community centers, military bases, airports, fitness facilities, YMCAs, libraries and many other locations.

    Recent Accomplishments

    The company recently announced 120 new locations secured in September, for the intended placement of healthy
    snack machines across the country. For the quarter ended September 30, 2014, the Company has entered into 310
    location agreements on behalf of its franchise network.

    Fresh Healthy Vending recently entered into an agreement to borrow up to $1.5 million to install up to 250 Company-
    owned micro markets. Each of its micro markets features an open display of healthy snack products, as well as a
    refrigerated and freezer case containing beverages and a variety of fresh and healthy offerings.

    In the previous month, the company secured 75 locations in the month of August for the intended placement of 90
    healthy snack machines for its nationwide franchise network. "Month after month, we continue to demonstrate that
    Fresh Healthy Vending has the ability to identify and secure qualified locations around the country for our franchisees,”
    said Alex Kennedy, CEO of Fresh Healthy Vending. “With the majority of our August location contracts oriented towards
    youth venues, such as educational institutions, dance/gymnastics studios, public libraries and community centers, we’re
    seeing communities more attuned than ever on the benefits of following healthy diets and seeking out healthier
    choices. It’s exciting to see our footprint grow every month with added locations secured in new and existing regions.”
    During August 2014 schools made up over 45 percent of the locations.


    Financial Fitness

    VEND has a market cap at $28 million with an enterprise value of $31.5 million. The company only began bringing in
    revenues about a year ago, and has yet to turn earnings positive. The balance sheet is not exactly balanced, however
    it does not look all that bad as the potential for a major increase in revenues looms around the corner. The stock is
    currently trading at 6 time’s sales, with 22 cents of revenue per share.

    There were 26 million shares outstanding as last reported by the company, with a current float below 10 million. The
    recent convertible financing deal may add up to 2 million shares over the next couple of years not including any new
    financing. The company has 2 cents of cash per share, and owes slightly less than that per share. The difference
    between the company’s accounts receivable at $2 million, and its accounts payable at $6 million is the only real head
    turner.

    Risks

    The company has started experiencing negative impact from new regulations in California and elsewhere, and the
    company has had to make a slight adjustment to its strategy in those locations, including increasing its percentage of
    company owned units. There is no guarantee that this strategy will prevent more negative impact from regulations in
    the future.

    Our Trading Strategy

    This is perhaps another buy and wait stock, however with the current timing, and some fairly intense selling of late the
    stock has come down in value quickly to possibly allow for rapid exploitation of the inefficiency. This would involve
    buying soon in the very low $1.00 range in the hopes of a quick rebound perhaps as high as $1.40. Holding the stock
    for several months to a year we believe may potentially see a price in the 2-3 dollar range and beyond.

    With no reason to fear dropping below a dollar given that the stock trades on the OTC BB, a standard stop loss in the
    20-30% range would be in order, as would a trailing stop loss after a 15-25% gain.