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OPCO an Undervalued Play in an Increasingly Hot Sector

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OPCO an Undervalued Play in an Increasingly Hot Sector

Coming off of another quarter of record-breaking financials, with Q1 FY16 net revenues and net income up 10.3 and 24.7 percent respectively YOY, OurPet’s Company (OTCQX: OPCO) chairman and CEO Dr. Steven Tsengas recently told Austin, Texas-based IR/PR/SMR firm DreamTeamNetwork in an audio interview (http://dtn.fm/5z69S), that he thinks 2016 international sales could be one the biggest positive surprises from the company moving forward. This just after an extremely strong showing of the company’s new OurPets® Intelligent Pet Care™ line of smart products at the industry’s premier event, the Global Pet Expo, which is presented every year by the American Pet Products Association (APPA) and Pet Industry Distributors Association (PIDA).

Tsengas tipped his hand about international market traction horizons to DreamTeamNetwork in the aforementioned interview, explaining that the company’s OurPets and the PetZone brands were already seeing very strong floor play in China, Japan and South Korea, where the company has localized its initial efforts, and built up a tight rapport with consumers. With around 11 million dogs and 10 million cats (Japan Pet Food Association), Japan is a market that is noted for appreciating good design and should be prime development territory for OPCO, which should have no trouble adding to its position here. The same is true over in South Korea, where a similar cultural taste for ingenious design predominates, and where the pet population is on track to hit one million for the first time this year (http://dtn.fm/v0Vew).

The global pet market is a nice, stable growth environment for an innovator like OPCO, which is growing its retail footprint/consumer exposure via both its pet parent/prosumer OurPets brand and its mass market brand, PetZone. The latest Packaged Facts report that looks closely at the bullish scenario developing in the sector, with increasing interest by private equity and other M&A activity on the rise, lays out the case pretty well as to how there is plenty of room for growth. The continued strength of operators such as the country’s biggest rural lifestyle retailer, Tractor Supply Company (NASDAQ: TSCO), with its 1,500-plus stores and third consecutive year hosting Nestle’s (OTC: NSRGY) Purina Days last month, offers clear indication to the investment community about the true bedrock potential, and upper-limit scope of this market.

Underlying market dynamics like those driving the rise of TSCO have made other retailers and sector majors, such as Petco and PetSmart, hot properties for investors who are looking to cash in on people’s growing obsession with their pets. These same dynamics should also help propel lower-hanging investment fruit in the midcap range on down to new-found securities stardom. The market for pet products and services is currently on track to hit upwards of $91 billion in annual sales by 2019 (http://dtn.fm/vJ2I5), and you can bet your bottom dollar that the smart money out there is hard at work injecting further consolidative forces into this seemingly recession-proof consumer market.

OurPet’s Company is a great hidden gem type valuation story amid all this, and the company also has the IP/visionary design capability to surf the momentum with style, capitalizing on sector buzz in order to bring its exceptional product designs to light before the eyes of eager, pet-loving consumers. In the U.S. alone we have around 163 million or more cats and dogs, and the tendency to treat these pets like fully-fledged members of the family is steadily on the rise. This is a trend that OPCO is poised perfectly to benefit from with their OurPets brand of premium offerings like gorgeous, heavy-duty stainless steel feeding bowls that have a proprietary, patented, permanently-molded rubber ring on the bottom that prevents sliding and noise when the animal eats. Similarly elegant looking, yet robust and functional designs, each of them engineered with careful consideration of the animal’s needs, as well as the owner’s décor, have come to typify the OurPets brand in the minds of high-end and not-so-high-end consumers alike.

This dual brand approach by OPCO is ideal for courting the more lucrative high-end pet parent prosumer, and, as more people gravitate into this fold, OPCO will continue to shine more and more brightly as a design shop through the OurPets brand. The tendency for people to treat their pets like bonafide family members is on the rise globally as per capita incomes rise, and, in part, this may be due to the phenomenon of people who (as a country becomes more affluent) typically wait longer to have their first child, in which case the pet fills an emotional void.

For more information, visit the company’s website at www.ourpets.com

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