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Strong leadership and plan of action. May leverage relationship with Jay Brown and Roc Nation.
The recent 24% surge in this company's stock price is a gift for future shorts. Skullcandy sells a poorly-made, commodity product that has a shelf-life of about 3 months. When revenue drops 28% year-over year and the CEO says that it could have been worse, and then touts a new agreement with Wal-Mart as a sign of good things to come, you know your brand and your business are in trouble.
Trading near tangible book value. The stock is oversold. Even if dire predictions are true about a permanent reduction of market share is true, then the stock costs roughly what it's worth currently.However, there are some potential catalysts. Skullcandy just brought aboard another successful Nike manager (a VP, actually). Also, Skullcandy is actively reducing their distribution through their discount channel. This will improve their image and cause customers to reduce their bargain-hunting for Skullcandy products and buy at retail.The upside potential is much stronger than the downside.
Short. Trendy headphones maker has seen its hey day and is not passé on the slopes.
New CEO has a strong plan in place. Signs of insider support.The Crusher headphone reviews are slightly mixed but overall good. The Gaming headphones seem to be doing well and growing rapidly. Fixing packaging issues that they thought were hurting sell through. International sales expanding save for a major retailer going bankrupt.Most importantly, market cap is below what they have on their books. Down side risk is low at this point, while upside potential fairly high.
Undervalued with High P/E, and recent insider action.
More competition will mean lower revenue growth
IAG , SKUL , PBR, VALE, SLW, CLF, PAY, AMX, NAV,
Failed IPO at $20 now down 2/3. CEO jumped ship, and founder now back in charge. Speculative play for 50% upside. Stock is worth $10-12. Plenty of teen fashion risk, but take a look at their headphone ranges. They don't look too bad.
Risky play, but dirt cheap. Really low forward P/E and PEG, even if they are overestimated should be good value at this time. Company management seems to think so as well. If my reading of their 8K paper is correct the company is going to buy back a significant portion of outstanding shares. While it will add debt to the company, I think it is a wise decision from the management at this price level.
Aside from a slightly lower guidance and a lot of speculation I can't see why this stock is down 75% in the last few months?
Bad News priced in. Ready to run with any decent news. The bar is not set high.
Bought in RL@6.77
Finally cheap enough. P/E < 9, min. earnings est. of 10 analysts for 2012 and 2013 is $1. Great ROE of 24%, still growing rev and earnings. Cons: headphones. Who needs them? Make you go deaf...what?
Short squeeze possibility
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