- Anyone selling anything knows that relationships are key. Whether vying for shelf space, endorsements, or validation from bigger partnerships, strong relationships are a vital part of long-term success.
- You can see this playing out recently in public market deals, like Molson Coors Brewing acting as a major validator of HEXO's basic products, or Constellation for Canopy Growth's underlying cannabis offerings. The validation, branding and exposure benefits could be priceless.
- Another new company operating in a coming $52B market has some compelling relationships in place that could result in big revenue growth. Trutankless Inc's (TKLS) smart home water heaters are at the intersection of some major trends, and their sales already appear to be reflecting a 7X increase in their distributor base by the end of 2018. With 167% revenue growth year-over-year in Q3 2018, this could be the start of a much broader breakout for Trutankless.
NEW YORK, NY / ACCESSWIRE / April 11, 2019 / Sales is all about relationships. Inking deals with bigger companies and distributors is important to almost anyone with a physical product - whether that be shelf space, ecommerce space, or just collaborating on product development. We can find promising examples in recent headlines among public companies: Molson Coors Brewing (TAP) announced the formation of a joint venture with HEXO Corp (HEXO.TO) to develop nonalcoholic cannabis-infused beverages. Or consider Canopy Growth Corp's (CGC) partnership moves with Constellation Brands, Martha Stewart, and even Seth Rogen.
The common thread is forging relationships with established companies that can both validate and push a product in the market. Identifying these companies early can be a key step to sourcing investment ideas that have a shot at performing in the long-run.
A Company With The Right Relationships?
There's an emerging player in the home improvement world that, interestingly, has all the right stuff to get traction with consumers. Trutankless Inc. (TKLS) is a provider of smart home heating products, and their lead Trutankless electric on-demand water heaters are getting traction as a top option for homeowners. They've received industry accolades, and some strong industry relationships forged recently could put them in a whole new category in 2019. This small company started 2018 with only 165 locations in their wholesale footprint, but increased 7X to over 1,000 wholesaler locations at the end of that year.
This increased activity may have led to a Q3 2018 hike in sales over the year-ago quarter of 167%.
Americans will undoubtedly recognize many of the names that now install, use, and distribute their tankless products:
- Homebuilders like Lennar Homes (Florida), DR Horton, Shea Homes, and the NAHB's 2019 Custom Builder of the Year, Cullum Homes.
- Recognized plumbing and installation service providers including Mr. Rooter, Benjamin Franklin, and RotoRooter.
- And wholesalers like Ferguson, Hajoca, Hughes Supply, WinSupply locations, and Morrison Supply.
Noteworthy here is the name recognition. These are some of the largest and most trusted HVAC, plumbing and appliance installers and distributors in the nation, and they’re now stocking Trutankless' offerings.
And while many people might not realize it, this is big business. According to a report by Persistence Market Research, the global market for water heaters of all varieties is estimated tobring in $52.8 Billion in revenue by the end of 2021. In 2018 over 8.5 million storage-type water heaters were shipped/installed in the U.S. accordingto The Air-Conditioning, Heating, and Refrigeration Institute (AHRI).
Why The Recent Acceleration?
Trutankless is accelerating for a few reasons. First, they've received accolades across the industry for one of the few compelling electric tankless offerings on the market. The device was featured as a water saving device in Consumer Reports' Top 5 Remodeling Trends for 2016 and ''Best of Houzz'' in January 2017 for the third consecutive year.
Second, they're capitalizing on a hot trend in the smart home. Their products are app-connected and integrate with home automation systems, putting them in the same category as companies like Nest, which is transforming the mundane market for thermostats as consumers demand connected appliances that can improve efficiency.
Finally, their electric tankless offerings represent a compelling offering for homeowners, especially in the southern U.S. where renewables and a lack of access to natural gas have made all-electric homes a common occurrence. The share of U.S. homes that are all-electric is climbing rapidly, and all-electric made up an astonishing 25% of homes in 2015. In the South, they make up 40%, and as the U.S. makes its slow move towards renewables like solar power, electric HVAC options like Trutankless' are likely to see further increase.
What's It All Worth?
Trutankless takes a unique approach to the connected home, and demand for their tankless heating products appears to be increasing. Compare this emerging company to the well-received Viomi Technology (VIOT) IPO of 2018. This China-based maker of smart connected home appliances, including refrigerators, ovens, dishwashers, robot vacuums, speakers and security devices, has a market capitalization of over $750 million! With more sales channels in place at the end of 2018 and expansion a key focus into this new year, Trutankless' (TKLS) offerings could be top contenders in this emerging space.
About One Equity Stocks
One Equity Stocks is a provider of paid-for research on publicly traded emerging growth companies. This is an advertisement. We are not a licensed broker-dealer and do not publish investment advice and remind readers that investing, especially in penny stocks, involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for-profit business and is typically compensated for coverage of issuers we cover as well as other advisory work we perform. Although we always strive to be objective and present the facts, you should assume we are biased because of the financial relationship we have with companies we write about. We have had an advisory relationship with TKLS since March of 2019 and may receive up to 600,000 restricted shares of TKLS for various advisory services including this advertisement over the next 180 days. We have not sold any stock, but may do so without notice in the future, and if so are unable to update this disclosure. We are also reimbursed for expenses we incur related to the provision of advisory services. Please contact us at info@investorclick.net for additional information or to subscribe to our intelligence service.
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