Skullcandy finally gets a bit of positive news
Bloomberg reports that representatives from Royce & Associates and Roth Capital think Skullcandy makes an attractive takeover target since its 66% market cap loss in the past year and a half. As a TRLG shareholder, I'm fairly skeptical of this type of takeover/buyout news, but nonetheless SKUL seems way too cheap right now. FCF in 2011 was $20+MM, and could come close to $30MM for 2012. I tend to like (virtually) debt free companies that are trading at a P/FCF of 7 or so. Beats and Bose headphones sell for 2-5x what Skullcandy headphones sell for (so I wouldn't say they are direct competitors), and Skullcandy markets to kids and teens (they break stuff, they replace stuff). Prior to investing, I actually bought a pair of their [less-flashy] earbuds just to make sure the product didn't completely stink and the sound is great. I don't think this brand is going anywhere, anytime soon.