Charles & Colvard Must Sell Millennials And Gen-Z On Moissanite Or Fail

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About: Charles & Colvard, Ltd. (CTHR)
by: Pantho Investments
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Pantho Investments
Long/short equity, value, growth at reasonable price, special situations
Summary

Patents have expired; company has no margin for error.

Despite jewelry industry not historically having a robust middle market, declining diamond sales and societal trend of “experiences over things” has paved a potential path for F1 brand to succeed.

Company should swing to profitability soon but the stock is fairly priced here; only organic growth in the second half of 2017 can justify a higher stock price.

Investment is highly speculative and hinges on the success of marketing moissanite to the younger generation. Don’t count on the previous generation to buy in as they spent their lives being sold on diamonds.

Do not underestimate the power of marketing and how demand can be essentially created out of thin air; never forget that the diamond industry wasbuilt on the back of powerful marketing campaigns.


Overview

Charles & Colvard (CTHR) is at a turning point and the 2nd half of 2017 is key. The stock has not been impressive at all historically, but variables are beginning to change