SFLMaven Corp (OTCMKTS:SFLM) – formerly “Sun Kissed Industries Inc (OTCMKTS:SKDI)” – has been running higher in a steady trend ever since the company was acquired by Sun Kissed late last year. Shares are up almost 500% in four months as the company’s basic strategy and long-term track record becomes clear to market participants.
In short, SFLM is a luxury goods ecommerce play with a primary marketing and sales engine driven by widely visible auctions of premium jewelry and watches over the eBay platform. In all, the company has generated well over $130 million in sales over the past 18 years and has developed a strong reputation in the luxury goods space.
That’s a far cry from the state of affairs at Sun Kissed prior to the SFLMaven acquisition. The transition from speculative development-stage operation to lucrative commercial-stage operation is a big leap and is the primary reason the stock has performed so well over recent months.
Another big reason SFLMaven Corp (OTCMKTS:SFLM) has been such a dramatic success on the OTC playing field this year is because the company has started to grant more granular access to the market where its performance is concerned.
It’s a simple rule of thumb: when things are going particularly well, focus on transparency and visibility. In this case, SFLM is growing the topline well and bringing in strong sales on a weekly basis. So, it makes perfect strategic sense to open the curtains and let the world see that weekly data.
For SFLM, that means letting people see the results of its so-called “Famous Thursday Night Auction” events. Each week, the company ramps up interest in its inventory and stokes bids in a big auction event for all the pieces up for grabs that week.
So far, based on company press releases, it looks like the company brings in $200-250k per week in its auctions, which adds up to about a million a month in terms of topline run-rate.
As noted in its recent release, in recent weeks, the Company has been issuing weekly revenue reports to the market to underpin the value of the Company, with the last four updates totaling around $1,000,000 in topline revenue for a weekly revenue rate that puts SFLM on pace for $12M per annum. SFLMaven’s ‘Famous Weekly Auctions’ are a fixture in the industry stretching back two decades, and regularly bring in revenues in excess of $250,000 per week.
We would also point out that, based on indications from other luxury goods companies, that run rate may even improve over coming months given the powerful impact of economic growth and stimulus money on demand for luxury goods like fancy watches and glittering jewels.
What’s in a Name?
The other key point driving recent trade in SFLMaven Corp (OTCMKTS:SFLM) is FINRA’s recent approval of the company’s official name and ticker change. As noted above, this was Sun Kissed Industries Inc (OTCMKTS:SKDI) up until just a few days ago.
Many people overlook the importance of this step. But it’s hardly insignificant. A name and ticker change can often act as a serious catalyst because it generally lines up the story in a manner that people can more easily understand. Put another way: it reduces the mental friction in appreciating the stock and its shareholder value proposition.
Imagine a pet store business trading under the name “Acme Gold Mining” with the ticker “AGLD”. There’s mental friction there. Once it changes to Acme Pets and the ticker MEOW, things just line up better.
In this case, the name and ticker change have clearly had an impact. We would expect that continue to offer a simple tailwind, along with the company’s continued focus on highlighting its strong weekly sales activity.
That highlights a valuation shortfall, with most high-end luxury goods stocks trading in the neighborhood of 2.5-5x forward sales. SFLM is sitting around 1x forward sales right now, suggesting it could potentially have significant room to run as more people get to know the story.
Joseph Ladin, CEO of SFLMaven, commented in the company’s most recent release: “We are excited to be able to bring our public company corporate identity in line with our long established SFLMaven identity. We continue to write impressive topline revenues week in, week out and I believe that, as we are massively undervalued currently, shareholders will share in the profits of our journey throughout 2021 and beyond.”