Sign Up NowThis Month's Tiny Gems - February 2013

Chanticleer Holdings, Inc. (HOTR)
Palatin Technologies, Inc. (PTN)
University General Health System, Inc. (UGHS)

 

 

 

Chanticleer Holdings, Inc. (HOTR)

 

Chanticleer Holdings, Inc. (HOTR) continues to break new ground globally with some of the most exceptionally executed Hooters® branded restaurant locations in existence, and the company is leveraging ownership interests in the world-famous brand's parent company, Hooters of America, to capture dynamic growth space in several emerging markets. You would be surprised at just how insanely diplomatic the American sports bar experience can be, with its combination of a jovial atmosphere and quality food from a broad menu at moderate prices. Even in markets where springboard-like receptivity might be essentially overlooked, HOTR is finding opportunities to apply the same methods that have seen Hooters restaurants consistently ranked among the industry's top growth performers, all by speaking an international language of great food and gorgeous, friendly servers.

 

Chanticleer is taking a winning, high-profile model and deploying it in markets where a harmony of growing disposable income and the immediate allure of these beach-themed restaurants, which remarkably achieve an ambiance just like that of the original location opened back in 1983, strikes a unifying chord with consumers. Exclusive franchise rights under the Hooters banner in Espirito Santo, Minas Gerais, and Rio De Janeiro, three of Brazil's most populous states, means HOTR is primed for rapid shareholder growth. The company has an established presence via four locations in some of booming South Africa's top markets, including Cape Town and Kempton Park, as well as a location in downtown Budapest, Hungary.

 

A joint venture with the current Australian Hooters franchisee has also seen the company open at a superbly located spot in the burgeoning south-western suburb of Sydney known as Campbelltown. With a keen eye for such bustling locations and a proven formula for efficient, high turnover business, the Atlanta-based Hooters of America has grown substantially since the 2011 acquisition by Chanticleer and a group of major private investors, today representing a franchise network that spans over 430 locations in 28 countries.

 

The global brand presence Hooters has established will help to nurture the four or more new location openings HOTR currently has on track for 2013 and the plan is to continue to target key demographics within the emerging markets where they have the rights to develop and operate. Brazil, Hungary, and South Africa represent a huge envelope of growing middle class consumers to whom the business model speaks directly and with the 2014 FIFA World Cup set to take place in Rio De Janeiro, slated openings in relevant Brazilian markets could be a potential gold mine for shareholders. The current Brazilian market from those three most populous states alone, where HOTR is partnered with the already successful manager of two Hooters locations in São Paolo, could sustain some 40 restaurants with ease.

 

 

 

Palatin Technologies, Inc. (PTN)

 

Palatin Technologies, Inc. (PTN) has put together an exceptionally intricate understanding of the factors which drive agonism via a rational drug design model used to get at key, proprietary small molecule agonist, peptide, and peptide mimetic compounds with tremendous therapeutic upside. The company is currently pushing hard in their biopharma development programs, which are largely focused on molecules that can successfully regulate melanocortin and natriuretic peptide receptor activity.

 

This emphasis on highly targeted and receptor-specific solutions has led to several important product fronts, with the flagship product, Bremelanotide (currently in advanced-stage clinical development), being a treatment aimed at female sexual dysfunction (FSD). Bremelanotide is essentially a peptide melanocortin receptor agonist and the successful top-line results from the most recent (Nov 8, 2012) Phase 2B clinical trial are a rousing victory for PTN. With Phase 2B clearly showing statistically significant achievement of the primary and several key secondary endpoints, as markedly improved overall sexual function and reduction in stress related to sexual dysfunction both showed solid improvements, Bremelanotide is looking great for a product that was also very well tolerated.

 

Such recent positive safety and efficacy results for the company’s flagship product underscores development pipeline competencies, and PTN’s other leading drug candidates, most of which are melanocortin receptor-based compounds, benefit directly from the strength of those core tech competencies. The company currently has multiple classes of compounds in various stages of collaborative preclinical testing with global, innovation-driven biopharma powerhouse AstraZeneca, with a broad range of collaboration compounds for the treatment of obesity being chief among them. Also among the drug candidates under development which benefit from the core technology pipeline are indications for cardiovascular diseases and erectile dysfunction, as well as inflammatory and pulmonary diseases.

 

The commercial potential addressed by the various avenues of clinical development PTN is currently engaged in is sweetened by the fact that in most cases the market is either underserved or flatly unmet altogether by any compelling alternative. The license agreement with AstraZeneca, who remains steadfastly committed to developing melanocortin agonists for the treatment of obesity, provides clear outlines to the company’s marketing collaboration strategy. The commercial muscle provided by such industry leaders as AstraZeneca allows PTN to cap out the profit potential of its successes while deterministically offsetting the ricks/costs associated with such commercialization.

 

 

 

University General Health System, Inc. (UGHS)

 

University General Health System, Inc. (UGHS) has put together a three-pronged strategy for capturing territory in a domestic healthcare market set to balloon over 34.5% by 2020 alone, with a platform consisting of hospital facilities, senior living communities, and industry-related support services like billing, coding, and customized software solutions for handling the healthcare revenue cycle. This extremely diverse approach, integrating many of the essential logistical facets typical of the sector, has helped UGHS create highly-localized regional health networks with profound impact in a given radius.

 

The company’s flagship healthcare facility is a gorgeous fusion of cutting-edge clinical care capability, highly-personalized care, and a business culture that is omnipresently aware of how environment impacts mood and recovery. It is a kind of boutique approach that blends luxury hotel environs and personnel attitudes with 24-7 emergency service capability in a general acute care setting. The physician-owned University General Hospital was founded back in 2005 and formed the cornerstone of UGHS’s business, something which has since grown to encompass the acquisition of many other healthcare facilities, as well as the senior care, and support segments.

 

With baby boomers retiring in droves, the market for senior living facilities and healthcare is going to overheat, and UGHS is in a prime position to capitalize mightily on this dynamic. The results are already showing with quarterly revenues growing a very substantial 74.42% year-over-year from $20.7 million to $36.0 million. University General is also quite profitable with net income attributable to common shareholders coming in at $1.96 million for the most recent reported quarter, up $0.92 million from the prior year.

 

The company’s broad-spectrum approach to growth in the sector, focusing on acquiring complementary assets ranging from real estate and senior living infrastructure, to hospitals and other acute care facilities, as well as backend/ancillary support offerings means that shareholders can benefit in a very low-risk fashion from the obvious future sector trend. Healthcare as a percent of U.S. GDP is set to climb steadily higher over the next decade and the potential for innovations like the physician-centric health care networks UGHS is creating will end up crushing the sector dinosaurs easily with superior cost/quality metrics.