How Bullish Are We on Genius Brands International ( $GNUS) for Monday?
On June 15th, 2020 Genius Brands ($GNUS) (full name: Genius Brands International) launched its new “Kartoon Channel!” in over 100 Million U.S. television households and 200 Million mobile devices with over 4,000 episodes of family-friendly content. After flirting with a stock price of over $11 on June 3rd, it’s now a month later and things are heating up again.
On July 2nd, 2020 $GNUS had the most volume according to barchart.com. This is how it looked:
On Monday July 6th before the conference call I think we will see all-time high volume which could result in 350 million shares.
Genius Brands International, Inc. ( $GNUS ) is a leading global kids’ media company developing, producing, marketing and licensing branded children’s entertainment properties and consumer products for media and retail distribution. But is it a buy on Monday?
So far here is what we know:
- “Kartoon Channel!” initially included 1,000 episodes of family-friendly educational content for kids, and Genius has said an additional 3,000 episodes of premium content will be produced and rolled out throughout June and July.
- ARNOLD SCHWARZENEGGER has entered into an agreement to become a significant investor in Genius Brands International.
- Schwarzenegger is starring in and co-producing the new animated Genius show “Stan Lee’s Superhero Kindergarten.” The show is being co-produced by Alibaba Group Holding Ltd (ADR) and will launch on Amazon Prime in 2021.
- The celebrity connection is strong for Genius Brands. There are upcoming shows like Stan Lee’s Superhero Kindergarten, starring Arnold Schwarzenegger; Rainbow Rangers for Nick Jr.; Llama Llama, starring Jennifer Garner, for Netflix; award-winning toddler brand Baby Genius; adventure comedy STEM series Thomas Edison’s Secret Lab; and entrepreneurship series Warren Buffett’s Secret Millionaires Club.
- Kartoon Channel! content has been curated through a program code developed in consultation with Stanford University Professor Emeritus Don Roberts, one of the world’s leading researchers of children’s media, to ensure the delivery of positive and purposeful content that parents can always know will provide safe viewing for their children.
- The partner distribution ecosystem is strong. Currently, Kartoon Channel! can be accessed via Apple TV Devices, Android (mobile devices), Android TV, Amazon Fire Stick, Roku Devices, Xumo, Dish (AVOD + SVOD), Sling (AVOD + SVOD).
- Walmart toys. We know that on May 5th, Genius Brands International, Inc. announced that its Master Toy Partner, Mattel, Inc., will debut the first toy line at Walmart stores for the original preschool brand, Rainbow Rangers. This is expected to debut in August, 2020.
The conference call on Monday will have exciting business development news that should strengthen the mid-term prospects of this company. Between Amazon Prime as our U.S. broadcaster, and Alibaba as their Chinese broadcaster, $GNUS is well positioned.
Since May 14th the stock has been over $1.64. Barchart consider it a STRONG BUY. Lower resistance hit $2.31 in recent weeks. At the time of writing the stock is at $3.55 after jumping over 50% in a single day. Upper resistance is at $4.52 as of June 15th, 2020 itself. While disappointing day traders, the stock is a fan favorite among long-term investors.
Speculation on Stocktwits over the Independence day weekend has been rampant with watchers hitting 62,000 late on Sunday July 5th, 2020.
Average volume for the stock is 53.8 million. Schools and kindergartens have been closed due to lock-down and holidays and with the coronavirus spiking in the sun-belt states in July, 2020 Genius Brands seems well poised to gain from the macro scenario. We should note that in 2016, the stock rose to $7.12. Could it plateau above the penny stock levels once again?
In 2020 that’s somewhat likely. In the first half of 2019, this stock was about $0.30, so if you have held since then you have played your early-in strategy right. The ceiling for the stock is a bit harder to define. Seeking Alpha and the Motley Fool seem to be short on the stock, but this is a day trader’s market where old arguments fall short of today’s reality.
Genius Brands’ stock is once again gathering momentum and the hype is considerable. $GNUS won’t just be debt free due to these spikes, it will likely be cash rich soon. It was only 3 months ago that the company raised 11 million.
Genius Brands could be very volatile from the $4.80 to $8.00 mark if the news is very positive on Monday. A spike above $10 is also possible, considering its historical chart.
The brand also has a strong corporate social responsibility (CSR) component. Warren Buffett’s Secret Millionaires Club teaches kids lessons in business. Llama Llama, for example, is a metaphor for a single mom raising her kids, imparting strong values of self-confidence and responsibility. Given the racial tension and urge for equality, $GNUS partnering with a black American celebrity is also highly likely.
The company has between 15 and 30 employees according to their Yahoo and LinkedIn. The company’s management team is way above average with many industry veterans. The company therefore has:
- Strong macro headwinds with more kids staying at home during the pandemic.
- Gaining traction in partners, business development and its channel network
- Improving management team with deep industry experience.
- Day trading and Robinhood momentum with many new investors taking an interest in the “feel good” product (e.g. more female investors than most stocks).
- Huge potential marketing with celebrities and new revenue areas such as toys
- Rapidly improving financial position at a time when media and content companies are struggling
- A stock chart that is gaining momentum into the 2nd half of 2020 and into 2021.
The theme song of Rainbow Rangers is not what we should be judging this stock by:
Due to the potential of this becoming the Netflix for Kids, it’s worth a buy.