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The Perfect Share to Sex Up Your Portfolio

June 14, 2024

I keep saying this but it is important. This is a fantastic chart, blazingly bullish. The Russell 3,000 is the largest 3,000 US shares suitable for institutional investors. When this chart looks this bullish it is appropriate to be excited, even if tomorrow it decides to plummet. This is the best breakout since 2013 and that triggered a massive rise in US share prices.

Wonder why US shares are so strong. Well here’s a thought.

Eisman, who is known for predicting the 2008 housing crash, stated in a recent interview with CNBC that the U.S. economy is resilient. He attributes this to the strong market performance driven by investments in artificial intelligence and infrastructure.

“All the economists who said that, because the Fed raised rates 500 basis points, this was going to cause a recession, have been wrong, and we’re just powering through,” Eisman said. “I think the only conclusion you can reach is that the U.S. economy is more dynamic than it’s ever been in its history.”

Benzinga, 14 June 2024

There are many ways of taking advantage of this bull market and we will continue to discuss those on Quentinvest. But one exciting way is to find emerging companies with exciting stories showing explosive growth and I have found just such a one. Quite a quirky one, as it happens.

It has a somewhat clunky name but there is no arguing with the performance.

Our first quarter results signify an exceptional start to 2024. The momentum we cultivated in 2023 continues to build and it’s truly rewarding to witness the strides we’re making in fulfilling our commitment to help the world feel great through the power of better health. This progress is being fueled by a resounding commitment to high-quality, personalised solutions across each of our core specialties.

Demand for these personalised solutions has never been stronger. In the first quarter, we added a record 172k net new subscribers, while simultaneously achieving substantial marketing leverage. We believe our ability to attract customers to our platform in an increasingly efficient manner is primarily being driven by the ongoing evolution of our personalised solutions, as well as escalating consumer awareness and trust in the Hims & Hers brand.

HIMS Q1 2024 Letter to Shareholders, 6 May 2024

Plenty of Action at HIMS

We are making strategic investments in broadening the range of differentiated offerings available on our platform. This means an expanding portfolio of personalised solutions at attractive price points, which consumers are increasingly discovering through organic channels. We are also finding that consumers are expressing more satisfaction with personalised solutions relative to generic alternatives across many of our specialties, resulting in stronger retention. These offerings tackle common consumer challenges by allowing providers to adjust dosages to help mitigate side effects, using unique form factors to improve adherence, and offering solutions that address multiple conditions simultaneously. At the end of the quarter, over 35pc of our subscribers were opting for a personalised solution. We anticipate that continued innovation, such as our recent launch of Sex Rx + Climax Control, will further improve this trend by catering to diverse customer needs through multi-action treatments. This year, we will continue to expand our range of personalised solutions in both established and newer specialties. In areas like Weight Loss and Dermatology, we aim to enhance the customer experience with more user-friendly form factors and eventually, a broader selection of multi-action offerings. Just as with Hard Mints and Heart Health, our upcoming offerings will address various customer needs and use cases across demographics through tailored treatments.

HIMS Q1 2024 Letter to Shareholders, 6 May 2024

The quote below summarises the business model.

The combination of a compelling suite of solutions backed by a strong brand is enabling us to drive robust growth, while gaining leverage on each dollar that we spend. This dynamic is increasingly visible as more customers actively seek out our platform either by visiting our website directly or through other cost-effective channels. Consumers have long recognized the value and benefits our platform provides:
● Convenience has always been paramount to our platform. We offer easy access to a wide range of healthcare services from the comfort of your home, ensuring users can access medical expertise whenever they need it, fostering trust and reliability in our brand.
● Access to care is facilitated by a variety of technology tools that streamline the healthcare experience. Our platform enables users to typically reach a provider and address their concerns in less than 24 hours, as opposed to weeks or in some instances months in the traditional health care settings.
● A simple and straightforward monthly price ensures customers know exactly what they are paying for and eliminates hidden fees and reimbursement uncertainties that have become commonplace in the traditional healthcare system. Across several of our specialties, we have observed that when the above factors are combined with unique products personalised to individual consumer needs at affordable prices, conversion and retention dynamics materially improve from what was already a solid position. As the number of users with a personalised product on the platform continues to increase, we expect that we will be able to more efficiently acquire a user base with a higher lifetime value to the platform.

HIMS Q1 2024 Letter to Shareholders, 6 May 2024

It feels as though something exciting is happening in this business.

The organic demand levels we are seeing as a result of this ongoing innovation indicates a substantial opportunity in front of us. In order to give ourselves the runway to meet our long-term goals and bring this experience to tens of millions of individuals, we expect investment in our affiliated pharmacies will continue through the next 3 years. This investment in breadth and capacity will help ensure we can continue accelerating penetration through targeted marketing investment, without degradation in the customer experience. We are pleased to have reached a level of scale that positions us to expand automation capabilities through the implementation of robotics and specialised software. We expect this will have a tremendous impact on our ability to offer access to a wide variety of solutions at even more attractive price points.

HIMS Q1 2024 Letter to Shareholders, 6 May 2024

They are aiming for tens of millions of subscribers yet presently they have around 1.7m of whom 602,000 are personalised; that sounds exciting.

Strategy – Get Down & Dirty with Hims & Hers

This stock feels exciting and the management has big plans which look realistic given what they have already achieved. They are on a roll.

The momentum we built in 2023 is continuing. As we further advance our mission to help the world feel great through the power of better health. The underlying strength of our business is propelled by an unwavering dedication to delivering the highest quality personalized care possible across each of our five core specialties, men’s and women’s dermatology, mental health, sexual health and weight loss.

Andrew Dudum, CEO and co-founder, Hims and Hers Health, Q1 2024, 6 May 2024

It looks seriously WOW!

Strong execution of our strategy is drawing more consumers to our platform than ever before, translating into robust financial performance. In the first quarter, subscribers grew by a record 172,000 quarter-over-quarter to over 1.7m. Personalisation continues to resonate with users. The number of subscribers opting for personalised subscription has nearly tripled over the course of the last year to north of 600,000 subscribers, representing just over 35pc of subscribers on the platform.

Andrew Dudum, CEO and co-founder, Hims and Hers Health, 6Q1 2024, 6 May 2024

They have big ambitions.

Our aspiration is to make Hims & Hers synonymous with high-quality personalised, affordable solutions.

Enhancements in both breadth and capacity will position us to further accelerate market penetration while ensuring a best-in-class experience for our customers. Through the integration of robotics and specialised software, we aim to build the necessary infrastructure to bring our unique offering to tens of millions of individuals. 

Andrew Dudum, CEO and co-founder, Hims and Hers Health, 6Q1 2024, 6 May 2024

Share Recommendations

Hims & Hers Health. HIMS. Buy @ $23.94

Footnote

I don’t think the CEO is going anywhere but he has made himself a controversial figure with the following comments.

The CEO of male hair loss company HIMS has sparked furious backlash and threats of a boycott after he offered jobs to university students protesting in support of Palestine

Andrew Dudum, who identifies as Palestinian-American, voiced support for the student protesters across US campuses on X.

‘Moral courage > College degree,’ the CEO, 35, wrote on Wednesday. ‘If you’re currently protesting against the genocide of the Palestinian people & for your university’s divestment from Israel, keep going. It’s working. There are plenty of companies & CEOs eager to hire you, regardless of university discipline. 

Dail Mail, 6 May 2024

In the latest quarterly report, he tried to backtrack.

I, in no way, condone nor support acts or threats of violence, antisemitism or intimidation and there’s absolutely no justification for violence on our campuses. Every student deserves to feel safe without fear of harm or being targeted for who they are. I am deeply saddened that my support for peaceful protest has been interpreted by some as encouraging violence, intimidation or bigotry of any kind. I do believe deeply in the right for people to use their voices and peaceful protest to drive change.

This right is critical to our democracy and must be protected. Our world today is more just because students throughout history have courageously taken to their campuses and use their voices to force change. Generations of Americans have engaged in nonviolent protests and these movements have led to some of the most important changes in our country’s history. As a father whose children are both the descendants of Palestinian refugees who fled the Nakba in 1948 and the descendants of Holocaust survivors from Poland. As I’ve previously shared, I have a personal appreciation for the different perspectives people have, which I live with daily at my dinner table. I hope and pray for peace and for an end to violence everywhere.

Andrew Dudum, CEO and co-founder, Hims and Hers Health, 6Q1 2024, 6 May 2024

I disagree with him; I think what Hamas did was unforgivable but his Palestinian roots make his views more understandable and I don’t think his customers will care. Nor do I think he will do it again.

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