Economic confidence and inflation expectations are both at multi-decade highs right now.
One assumes this has something to do with the fact that the epic nightmare of the Covid-19 pandemic only really impacted about half of the citizens of the developed world in terms of employment prospects, income, and future financial outlook. But it impacted the other half so powerfully that central banks and governments around the world have taken historic steps to shore up the economic foundations of the world.
This has led to multi-decade highs in household savings among the upper socioeconomic tiers. That excess capital is flowing into asset markets, real estate, and luxury goods.
Basically, it’s boom-time for anything that isn’t necessary to everyday life. The excesses. The pressure release valves for monetary supply.
That is leading to potentially historic opportunities in stocks like Restoration Hardware Holdings Inc (NYSE:RH), LVMH Moet Hennessy Louis Vuitton SE (OTCMKTS:LVMHF), Signet Jewelers Ltd (NYSE:SIG), SFLMaven Corp (OTCMKTS:SFLM), Ferrari NV (NYSE:RACE), Capri Holdings (NYSE:CPRI), and Tapestry Inc (NYSE:TPR).
Spotlight: SFLMaven Corp (OTCMKTS:SFLM)
SFLM operates as a high-end online jewelry retailer that brought in sales of nearly $11 million in 2019 and over $130 million since 2004 on a proven track record featuring strong revenues over seventeen years.
That track record looks to have held up in 2020, despite the challenging context for high-end retailers during the period of powerful economic uncertainty, which is a very good sign. Now, as outlined above, is the time when this model could really pay off.
And, thus far this year, it would appear to be a winning model.
SFLMaven Corp (OTCMKTS:SFLM) most recently announced that eBay auction sales in March 2021 totaled $797,000 spanning 928 products sold, which represents a 20% sales year-over-year increase from $663,000 in March 2020.
According to the company’s release, the sales growth was primarily driven by the success of the Company’s “Famous Thursday Night Auction” event, which generated the majority of total sales from the SFL Maven eBay store. SFLMaven received 15.0 million impressions on its listings in the month, driving 23,452 page views.
“We were pleased to realize yet another strong month in March, driven by impressive user engagement and ongoing bidding wars given the unique, highly desirable nature of our jewelry inventory,” said Joseph Ladin, Chief Executive Officer of SFLMaven.
“While we sold nearly 1,000 items in March, the sale of a Piaget Diamond Men’s Watch for $18,600 is a testament to the quality of our sourcing, marking the largest sale we have realized year-to-date. We have seen increased macroeconomic strength, driving demand for jewelry as both as a fashion statement and as a store of value in increasingly uncertain times. The growing popularity of our Famous Thursday Night Auctions – as evidenced by our 15 million listing impressions – is particularly encouraging, providing us with a framework to scale up sales as we continue to bolster our inventory and sourcing efforts. I look forward to continued execution in the months ahead as we strive to build sustainable, long-term value for our shareholders.”
One simple view to take on SFLM is that it has been a remarkably consistent performer. Right now, the stock is trading at a market cap of roughly $9.8 million.
However, it is operating entirely as an online entity, which should give it an advantage in terms of valuation ratios relative to peers in the jewelry sales space.
Luxury goods stocks are trading at roughly 3-8x forward sales, and most have to maintain massive brick and mortar footprints.
Yet, SFLM is trading at 0.8x sales despite its more efficient paradigm on a unit basis.
SFLMaven Corp (OTCMKTS:SFLM) has started to regularly update its performance in weekly sales and auction events. That helps to provide granularity for investors and demonstrates the consistency of cash from operations given its model.
That has definitely contributed to the stock’s upward climb so far in 2021.
SFLM shares are up as much as 700% since early December, when it became clear that the company was reverse-mergering to becoming SFLMaven in its transition from Sun Kissed.
The stock has recently pulled back a bit to test its rising 50-day moving average, which was last tested in early March, sparking a 250% rally over coming weeks.