Sign up Australia
Proactive Investors - Run By Investors For Investors

Skin Elements attracts Speculative Buy from broker with four-bagger potential

The company is trading at $0.17, with the broker eyeing $0.73.
Skin Elements attracts Speculative Buy from broker with four-bagger potential
Skin Elements has strong upside according to Gloucester and Portman Capital

Skin Elements Ltd (ASX:SKN) is focused on the development of natural and organic skin care products.

The company is currently trading at $0.17, with Perth firm Gloucester and Portman Capital applying a Speculative Buy rating with a target of up to $0.73 as it implements a growth strategy.

The following is an extract from the report.

Company summary

Skin Elements Limited is an Australian owned and operated skin care company focused on the development, manufacture and sales of the natural skin care products - including Soléo Organics Sunscreen, Elizabeth Jane Natural Cosmetics, Elizabeth Jane Natural Anti-Aging Creams and recently acquired McArthur Organic Pawpaw Skin Care product ranges.

Positive developments so far this year

- Appointed leading Australian laboratory Baxter Laboratories Pty Ltd as its preferred Manufacturing Partner for Skin Elements’ range of natural and organic skin care;
- Completion of acquisition of McArthur Skincare, a leading Australian natural skin care business;
- Baxter Laboratories, the Company’s preferred manufacturing partner, delivered a 10,000 tube production run of the Soléo Organics sunscreen for orders from Japan and Slovenia;
- New sales in the quarter included the US market and Hong Kong, plus Australia via distributors and direct online sales; and
- Corporate and operational head office was expanded to provide an enhanced corporate environment for a larger personnel team post the McArthur Skincare acquisition.

Investment highlights

- Marketing programs and plans for product range expansion are ongoing;
- Potential to expand in new markets and penetrate further in the existing markets;
- McArthur Skincare’s acquisition gives it a ready market and distribution channels;
- Growing market for SKN’s product; and
- Baxter’s expertise in the sunscreen sector is of key benefit to Skin Element.

Our view

We reiterate our speculative Buy recommendation for SKN with a target price range over the next 12 to 18 months of up to $0.73.

We find the current price level attractive and recommend therefore that investors with a higher risk profile consider including SKN in their portfolio.

The share price does not reflect that SKN is a company that is growing, improving and expanding.

The company has demonstrated the ability to implement its growth strategy which includes the expansion of their Skin Care product range with cash flows and future profits, upgrading and expansion of the existing business through acquisition of new skin care businesses, and sealed further acquisitions.

The company also strengthened the management team, enhanced industrial relations and started capital market activities.

The SKN share price is currently trading at an estimated 2017 P/E of 3.89x and an estimated P/E RATE of 6.80x expected in FY18 with a forecast Target price range of AU$0.65 to $0.73, over the next 12 to 18 months.

We initiate with a Speculative Buy recommendation, offering a price triggers in the short term could be the completion of the companies future acquisitions and a possible contract with a major distributor in Asia and China, which may result in a significant increase in sales and revenues, due to the possible large market share out of Asia/China, with a better-than expected full year results for 2018.

Further increased investor awareness of SKN with release of new organic/natural Skin Care Ranges and future possible acquisitions of other similar organic/natural brands.





Register here to be notified of future SKN Company articles
View full SKN profile View Profile

Skin Elements Ltd Timeline

Related Articles

generic pill and bottle shot to denote Alliance's products
August 14 2017
The company has made the transition from a business capitalised at £90mln to company now worth around a quarter of a billion pounds - but has the market at large picked up on (and priced in) the transformation?
PreveCeutical Medical bidding to be big player in preventive healthcare
October 11 2017
Van Deventer aims to grow the firm's valuation from its current $40mln market cap to $1bn plus in the next few years
hepatitisC.jpg
July 27 2017
Regulatory sign-off will fire the starting pistol on the commercial launch in Europe

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2017

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use