GNUS: A “Genius” Discretionary Play

GNUS: A “Genius” Discretionary Play

A lot of investors already know that consumer spending accounts for about two-thirds of this country’s GDP. And they also know about the most obvious consumer discretionary stocks such as Amazon.com (NASDAQ: AMZN) and Nike (NYSE: NKE). What Wall Street often neglects to tell investors is that there are some unheralded discretionary stocks out there that are worthy of consideration.

Take the example of Genius Brands International (OTCBB: GNUS). Chances are there aren’t many brokers touting this stock to their clients. However, that doesn’t diminish the fact Genius Brands International has the potential to be the next in a long line of great discretionary growth stories. The company’s market value of just $12 million belies its growth potential, but savvy investors know a good thing when they see one.

Indeed, it should be noted that a study has shown 70% of moms in the U.S. know the baby genius brand. Genius Brands’ CDs and DVDs are sold at major retailers all over the U.S. and the company engages in direct-to-consumer sales at the social media level through Groupon (NASDAQ: GRPN) and Living Social.

California-based Genius Brands is a developer and marketer of entertainment products and the company’s Baby Genius line of music and education-based products and characters already has good brand awareness that is rapidly increasing. Genius Brands recently concluded three days of licensing talks at the Licensing Expo in Las Vegas, just the latest step in the company’s ascent up the brand awareness ladder.

Lady luck was the side of Genius Brands in Las Vegas as the company inked a licensing accord with JAKKS Pacific (NASDAQ: JAKK). JAKKS is an award-winning licensee of nationally and internationally known trademarks including Nickelodeon®, Warner Bros.®, Ultimate Fighting Championship®, Hello Kitty®, Graco®, Cabbage Patch Kids® and Pokémon®. The line includes Baby Genius(R) Be a Star Sing-Along Jukebox, Baby Genius(R) Be a DJ Bear Jam-bouree and Baby Genius(R) Musical Friends-in-the-Box. Genius Brands toys from the deal with JAKKS Pacific are expected to begin hitting the shelves by the end of summer in national and international retail chains, according to Genius Brands. The deal with JAKKS is expected to start generating sales late this year.

Then again, investors ought to note Genius Brands is no stranger to licensing deals with well-known companies. After all, Genius Brands already has a licensing agreement with Wendy’s (NASDAQ: WEN), the second-largest U.S. hamburger chain, which features Baby Genisu toys in kid’s meals http://www.wendys.com/kids_meal/.

In other words, Genius Brands has an added ingenious ways of making money through high margin royalty revenues through licensing agreements on everything from books to toys to sippy cups. The company even earns royalty revenue from mobile apps.

Bottom Line: Genius Brands is a small company with a big-time growth story that investors should not overlook. At some point, the Wall Street crowd will catch on, and savvy small cap investors take note of great potential when they find it.  Do your research on this company and watch for additional alerts on GNUS!
For additional information on Genius Brands International, Inc. (OTCQB: GNUS) visit http://www.stockorange.com/client-profiles/gnus

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