There aren't many businesses on the ASX that are in a growing industry, growing internationally and growing at a strong rate.
I think BWX Limited (ASX: BWX) is one of the most exciting companies with a market capitalisation over $500 million. Here are three reasons why:
Naturally finding growth
BWX is the owner of several natural skincare brands including Sukin, Uspa, Edward Beale and Renew Skincare.
There is a steady trend of consumers rejecting products that aren't 'natural' for the body or the environment.
The biggest part of BWX's business is its Sukin brand which is the number one natural skincare brand in Australia.
In FY17 the domestic revenue of Sukin grew by 43.5% which is really impressive considering how many years it has already been around. It could be another good year ahead for domestic sales with Sukin now being sold in Wesfarmers Limited's (ASX: WES) Coles.
Sukin growing strongly overseas
What I'm most excited about for Sukin is the growth it's achieving overseas. The populations of the UK, Canada and other markets have much larger populations than Australia and therefore are much bigger opportunities over the long-term.
Sukin is being sold in some of the biggest UK retailers like Boots and Holland & Barrett. The arrangement with Holland & Barrett also means that some Sukin products are being sold in the Netherlands and Belgium. Asia, other European countries and the Middle East could all provide future growth for Sukin as well.
In FY17 Sukin export revenue grew by 103.2% to $14.2 million and I wouldn't be surprised if FY18 was another exceptional year for Sukin's overseas sales.
USA acquisitions
The most promising thing about BWX's long-term future is its recent acquisitions in the USA.
It bought Fusion Minerals which is the leading US natural colour cosmetics brand. Mineral Fusion has an extensive retail reach with its distribution agreement with Wholefoods Markets USA. The BWX and Mineral Fusion teams are both going to work getting the other BWX brands introduced to the US market.
BWX also just bought Andalou Naturals Inc, which is a leading skin, hair and body care brand in the USA. Management expect this purchase to add approximately 10% earnings per share on a pro forma basis for FY18.
What I like about both of these acquisitions is that it gives BWX a large opportunity to expand into the USA with its original brands and also continue the strong growth that Mineral Fusion and Andalou were experiencing. BWX can also take the USA brands into its other markets.
Foolish takeaway
I think BWX is an exciting business with a lot of potential growth and new markets it can expand in to. It's currently trading at 26x FY18's estimated earnings, which I think is a very reasonable price for how much growth BWX may generate over the next few years.
