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Brand recognition is usually the single most important part of any sales strategy in the consumer discretionary sector.

Something we have found over the years to be a particularly good strategy in the micro cap space is to find and capitalize on relatively undiscovered (by investors) brand acquisitions with application to higher growth markets.

For example, today we have a play in a TINY FLOAT penny stock that distributes high-end, well established branded sporting goods to the Mexican and South American markets (where broad consumption growth is roughly 3X that found in the United States).

We like the context framed in these terms. But, as usual, we like a growth catalyst. In this case, that catalyst takes the form of expanding relationships with regional retailers.

The ticker is LUVE.

The company sells Prince® goods – one of the most popular racquets in tennis, but they also make footwear, balls, strings, grips, bags, stringing and calibration machines, and other accessories for the tennis and squash players; clubs, bags, and golf-related accessories; products for paddle sports, including platform tennis, paddle tennis, paddleball, and padel; and racquets, footwear, gloves, eyewear and other accessories for squash and handball).

And, just a few days ago, LUVE announced that they are in negotiations to expand their inventory and get more aggressive via an enlarged relationship with Sears Mexico.

This is a very sound all-around setup and we expect strong results. For more details, please check out the full report below.

Symbol: LUVE

Company: Luve Sports Inc.

As noted above, when it comes to consumer discretionary, we have found the best recipe for success is a combination of solid market mechanics and the factors of growth contexts and solid branding.

With LUVE, we have all our bases covered: The stock has a small float of less than 23M shares, and is trading lower but on recently expanding volume, suggesting a turnover from weak to strong hands – at the mechanical level, an increasingly robust share market.

In addition, Mexico and South America are tremendous growth contexts, far outpacing the US and Europe, as far as y/y consumption growth. That presents a similar opportunity for a company like LUVE.

Finally, the recent acquisition of a truly top, possibly legendary, sporting goods brand like Prince seals the deal for us.

But, if that weren’t enough, we also have our key catalyst, with the company recently adding two important dimensions: expanding inventory presence at major retailers and a very polished online marketplace.

It has all the angles covered, as far as we’re concerned.

About LUVE

LUVE (Luve Sports Inc.) sells sporting products for specialty sporting goods stores, chain stores, and department stores under the Prince USA brand name in Mexico.

LUVE offers racquets, footwear, balls, strings, grips, bags, stringing and calibration machines, and other accessories for the tennis and squash players; clubs, bags, and golf-related accessories; products for paddle sports, including platform tennis, paddle tennis, paddleball, and padel; and racquets, footwear, gloves, eyewear and other accessories for squash and handball.

LUVE sells its products through its Website princemexico.com.mx.

LUVE was founded in 2008 and is based in Zapopan, Mexico.

Top Investor Highlights

• LUVE trades with a small float and is seeing increasing volume in recent days. That presents a strong mechanical picture for one our patented mile-high spikes if the stock gets traction tomorrow.
• LUVE is in the process of expanding the breadth and depth of its exposure to the Mexican market, with recent headlines and PR touting a heated negotiation for more shelf space (more revenue bandwidth) in one of the fastest growing discretionary markets on the planet.
• LUVE is the distributor of a rock solid brand, with the Prince logo as identifiable as literally any in the sporting goods world.

LUVE Sports Plans to Start Negotiations with Large Retail Chain Again

JALISCO, Mexico, Dec. 9, 2013 /PRNewswire/ -- LUVE Sports, Inc. (LUVE) (or the "Company"), a distribution company focused on expanding the retail reach of high-end sporting goods and related products, is pleased to announce it will soon begin negotiations with Sears Roebuck de Mexico (or "Sears Mexico") again.

Sears Mexico is a department store chain founded in 1947 located in Mexico, operating more than 75 stores throughout Mexico.  It is operated by Grupo Carso one of the largest conglomerates in Mexico.

"We are excited to continue to sell our products to Sears Mexico," said Duncan Forbes, president of LUVE Sports. "They are a large retailer in Mexico.  We have them as a client and are looking forward to increasing inventory in our Mexican warehouse to take advantage of this distribution opportunity."

In summary, this is a small-float play with big prospects, a growth context, a hot brand, recent surges in investor interest, and recent catalysts that open up the sales channel such as expanded presence at regional chain retailers and a polished web sales portal.

As we see it, the stars are aligned and the setup is ripe and ready to spring RIGHT NOW.

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