Nobody wakes up in the morning and says, “I’m going to make the least healthy choices possible today.” But it can be hard to believe that. Just look at all the smokers in front of office buildings, or at obnoxiously long drive-thru lineups outside fast-food restaurants.
But before you rush to judgment, though, realize that these are all ironclad habits. They formed when you tried to be cool in high school… and ended up as a pack-a-day smoker. Or when you started that 60 hours per week job and had no time to cook healthy meals.
Fortunately, with a bit of effort, you can replace these bad habits with good ones. All it takes is a solid plan that makes these new behaviors attractive (and the bad ones unattractive). With more people out there becoming health-conscious, businesses like Healthier Choices Management are finding a market.
In this article, we’ll explore what makes HCMC tick, as well as other companies in the broader wellness industry.
About Healthier Choices Management
Let’s start by talking about HCMC and its history. As a business, Healthier Choices Management has been around since 1985. But they had only issued OTC stock in recent years when they consolidated their assets under the umbrella of a holding company.
These assets include an organic foods grocery store and three health shops in Florida, as well as a small vape store chain with locations spread across the Southeast. But its most significant holdings aren’t brick-and-mortar – they are patents on proprietary vaping technologies.
According to company spokespeople, these components, which promise a cleaner, more enjoyable vaping experience, hold great potential for future growth. But they also claim that Phillip Morris has illegally appropriated their technologies. As a result, they’ve taken legal action against the tobacco giant.
HCMC is Pursuing Legal Action Against Phillip Morris
It’s a classic David vs. Goliath match-up. But despite the wild power dynamic of a small holdings company taking on a massive multinational, HCMC has a rock-solid case. In it, they accuse Phillip Morris of infringing on their patents with IQOS®, an alternative smokeless tobacco product.
In this action, Healthier Choices Management has retained the legal services of Cozen O’Connor, one of the top 100 law firms in America. This legal giant prosecutes cases not just in the USA, but around the world. So, the fact that Cozen has taken on this case illustrates its legitimacy.
This fact has not been lost on OTC investors. Soon after Healthier Choices Management filed their suit in November 2020, HCMC stock began to rise from the dead. Very quickly, its price went from being less than 0.0001 to a 52-week high of 0.0043 in February 2021.
Since that time, investor fear, uncertainty, and doubt (as well as some profit-taking) has driven HCMC back down to 0.0008. Despite this, nothing has changed – Healthier Choices Management is waiting on a judge to set a trial date, or for Phillip Morris to offer a settlement. And so, retail investors, eager to gamble on this case’s outcome, are buying up HCMC shares.
Is HCMC a Good Long-Term Investment?
To be honest, most of HCMC’s recent run-up has to do with the Phillip Morris lawsuit. But, is there a case to be made for investing in Healthier Choices Management after the legal dust settles?
If HCMC’s fundamentals remain the same, not really. At present, their revenue-generating assets consist of a handful of retail outlets – eleven, to be exact. The amount of revenue generated by these enterprises sits in the low seven-figures.
Now, that’s great if you’re a local entrepreneur trying to make a living. But it’s far from compelling for even OTC investors. Remember: to be considered a micro-cap stock, an enterprise needs to be worth at least 50 million USD. And currently, the Phillip Morris lawsuit is the ONLY reason why HCMC is a micro-cap.
Professional investors determine good investments in a variety of ways. However, comparing book value to revenues is a common method. According to conventional wisdom, the market has fairly priced a firm if its book value is roughly 2-3x revenue. At the moment, HCMC’s book value sits at an eye-popping 120 times of its annual revenues.
The moral of the story? If you’re investing in HCMC, only do so as a gamble on the pending lawsuit – not on its long-term potential for growth.
The Wellness Industry Has a Positive Long-Term Outlook
That said, who knows what the future holds? After the lawsuit settles, the owner may decide to invest in their core business. By plowing tens of millions of dollars into expansion, they could grow annual revenues/profits significantly. And best of all, their shares still cost less than a penny.
On top of this, the wellness industry continues to grow in America. According to McKinsey and Associates, the sector is growing at an annual rate of 5-10%. That includes health food & supplement stores, and arguably, tobacco alternatives (vaping).
But if you’re willing to entertain this possibility, for goodness sake – wait until the lawsuit wraps up. Afterwards, there will be a spike, followed by a plunge as investors cash out. Buy before, and you’ll wait a long time (if ever) to recoup your investment.
However, once HCMC is once again worth 0.0001 (or less), you’ll have a good baseline to place your bet on Healthier Choices Management’s long-term success.