Is The Marygold Companies a Good Investment?

More than likely, mainstream investors will not immediately find the underlying business of Concierge Technologies Inc. (PINK: CNCG) particularly attractive. Scheduled to uplist shortly to a proper exchange, Concierge, which is a global holding firm operating subsidiaries in disparate business categories, will also change its name to The Marygold Companies Inc. Given a rather mundane backdrop, why should you consider its offering?

Admittedly, the soon-to-be-called Marygold probably wouldn’t command much attention in normal circumstances. However, circumstances today are anything but normal. With Russian President Vladimir Putin’s dangerous decision to invade Ukraine, the global markets have responded with a flurry of activity — most of it negative.

Obviously, the unnecessary loss of human life resonates the deepest with the international community. However, what has been most upsetting for world leaders is the complete disruption of the modern global order. Since the establishment of the United Nations — an organization committed to forging global peace and security — countries generally sought to resolve conflicts through diplomacy, not warfare.

Today, the paradigm has shifted dramatically, with nuclear threats sadly becoming the norm. Under this circumstance, publicly traded companies tied to major international operations are at great risk of suffering steep corrections. While small-capitalization stocks like Marygold are certainly not immune to downturns, they stand some chance of flying under the radar.

What Does The Marygold Companies Do?

A global holding firm, The Marygold Companies features several operating subsidiaries in the financial services, food manufacturing, printing, security systems and beauty products industry. Its offices and manufacturing facilities are located in the U.S., New Zealand, U.K. and Canada.

Though one of the small-cap stocks — featuring a market value of approximately $113 million prior to its uplisting — Marygold distinguishes itself from completely speculative fare through management’s focus on building a “diverse, profitable and stable business that provides value for our shareholders,” per company CEO Nicholas Gerber.

Per Marygold’s investor presentation from November 2020, the holding firm operates these subsidiaries:

• UCSF Investments: Founded in 2005 and headquartered in Walnut Creek, California, UCSF Investments is a financial asset management firm that oversees commodity exchange-traded products (ETPs) and exchange-traded funds (ETFs).
• Brigadier Security Systems: Established in 1983 and headquartered in Saskatoon, Canada, Brigadier Security Systems provides multiple security products and services, including access control, camera monitoring and motion detection, intrusion alarms, video doorbells, fire alarm monitoring panel installations and maintenance.
• Gourmet Foods: Originating in 1966 in Tauranga, New Zealand, Gourmet Foods distributes both fresh and frozen products through supermarkets, convenience stores, cafes and service stations throughout New Zealand.
• Original Sprout: Founded in 2003 and calling San Clemente, California home, Original Sprout specializes in vegan hair care and styling products that have been featured on high-profile broadcasts such as the Today Show and Modern Living with kathy ireland®.
• Marygold & Co.: Recently established in 2020, Marygold & Co. offers individuals and their families a secure way to send, receive, spend and save through its mobile platform anytime, anywhere, with no minimums and no credit checks. Moving forward, Concierge will change its brand identity to align with this new subsidiary.

While neither Concierge nor Marygold may be household names, under its corporate umbrella, the holding firm’s global product footprint is massive, thanks to distribution partnerships like Target Corporation (NYSE: TGT), Exxon Mobil Corp. (NYSE: XOM) and Walt Disney Co. (NYSE: DIS).

Therefore, Marygold may provide an intriguing mixture of small-cap anonymity with large-cap punch. Still, the market environment today is frenetic, so due diligence is a must.

When is The Marygold Companies IPO Date?

Based on the company’s press release, The Marygold Companies received approval to uplist to the NYSE American exchange “in conjunction with an underwritten public offering of the Company’s common stock effective, March 10, 2022.” In addition, Concierge, which currently trades under the ticker symbol CNCG, will have a new ticker: MGLD. Subsequently, trading on the over-the-counter (OTC) market for CNCG will cease concurrent with the debut of MGLD stock.

Unlike a traditional initial public offering (IPO) or the first time a private enterprise distributes its equity shares to retail investors, an uplisting represents more of a promotion rather than a pure public market debut. Technically, Marygold under the Concierge name was already a publicly-traded entity. Still, you will find the holding firm’s brand included in the IPO calendar.

While MGLD stock does not represent a new offering in the strictest sense of the term, it is an IPO to the general public. In contrast to stocks traded on an exchange, the OTC market is essentially a decentralized platform. Rather than market makers providing liquidity to broker transactions between bulls and bears, traders in the OTC market engage directly among themselves via broker-dealer networks.

Typically (though not always), OTC stocks suffer from a lack of trading volume as mainstream investors largely avoid this arena, which is colloquially known as the pink sheets because of the color of paper legacy penny stocks were listed on. However, an uplisting to a proper exchange could help shift the narrative as it would expose promoted stocks to a wider audience.

Another key benefit of an uplisting is that — similar to a traditional IPO — the featured company is more likely to attract analyst attention. While an OTC listing doesn’t necessarily exclude coverage, analysts (especially the well-known ones) are prone to consider exchange-listed names for reasons related to reputation and performance.

For Marygold specifically, the timing offers an interesting setup. On the positive end of the scale, many investors are concerned about exposure to the crisis in Ukraine. While large-cap stocks generally tend to offer stable, reliable performances, outright conflict with one of the world’s great nuclear military powers was a narrative that few analysts likely considered last year.

For instance, American heavyweights like Boeing Co. (NYSE: BA) represent a massive concern right now as it and many others have pulled out of Russia. Such an action leaves an unexpected gap in pre-conflict revenue forecasts, boding poorly for exposed companies. However, Marygold and its subsidiaries operate largely outside the reaches of the conflict, presenting an intriguing upside thesis.

Still, the prospect of the battlegrounds of Ukraine spreading into other European countries is uncharted territory. Further, two countries have now been temporarily erased from the global economic network, thus levering the possibility of unexpected consequences.

What Analysts are Saying About The Marygold Companies IPO

Because of its history as an OTC stock, Marygold does not currently have analyst coverage, which is not a surprise. Analysts usually prefer to assess enterprises that command meaningful awareness and thus at least a modicum of trading stability.

However, the legacy outlook for the soon-to-be MGLD stock was negative, which again is not shocking. From its small-cap profile to its small revenue base compared to large and even mid-tier corporations, Marygold is a high-risk, high-reward trade. Anyone considering MGLD should be under no delusions that it could suffer from severe volatility.

On the other hand, the paradigm-shattering invasion of Ukraine presents an unusual opportunity for MGLD stock. Some of the company’s subsidiaries are tied to more indispensable items, such as food and personal care. Consumers are likely more willing to jettison discretionary products versus necessities during hardships.

As well, Marygold’s broader revenue footprint is mainly tied to markets outside the eastern European sphere of influence. While no company is completely insulated from the geopolitical flashpoint, MGLD is better protected than many other businesses.

The Marygold Companies Financial History

Although Marygold will induce skepticism among investors leery of small-cap trades or penny stocks, MGLD goes against the grain in that its stated focus on profitable enterprises is no mere marketing ploy. For instance, for the company’s fiscal year ended June 30, 2021, it generated revenue of $39.9 million, with net income of $5.85 million.

These figures compare favorably against the year-ago comparison, which saw revenue of $26.75 million and net income of $1.77 million. In fact, the last time Marygold suffered a net loss was during fiscal 2014, when it slipped $320,000 to the red.

In addition, interested buyers should note the company’s balance sheet, which is strong, especially for a business in the small-cap segment. One of the highlights is the cash-to-debt ratio of 5.56 times, reflecting an ability to potentially buffet economic storms.

The Marygold Companies Potential

With much attention now focused dubiously on large-cap companies tied to the eastern European markets, mainstream investors are fretting about the viability of interconnected businesses. On the flip side, while Marygold is technically a global holding firm, its exposure to the present crisis is limited, thus possibly affording a risky albeit intriguing hedging opportunity.

Where to Buy The Marygold Companies IPO Stock

Interested participants of the Marygold uplisting must acquire shares at the open, necessitating knowing how to buy stocks. But before you get to that point, you must have a brokerage account. Below is a list of best brokers for your consideration.

MGLD Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.

MGLD Pre-IPO

While pre-IPO shares for Marygold are not available, those interested in early-bird opportunities can open an account with Freedom Finance and apply for participation in confirmed new listings.