Private Equity companies have been approaching Skullcandy for years whether it is to buy company or provide financing.
Astro growing 20% a year (and will continue with console cycle) and easily worth $70 to $100 million which is 70-100% of today’s market cap.
CEO provided me access to China management to understand long-term strategy.
Selling of institutions and founder has depressed price and valuations to insane levels.
My history with Skullcandy
I have never written about Skullcandy (NASDAQ:SKUL) on Seeking Alpha, but I started buying stock in Skullcandy around May of 2013 when I had the "courage" to send the CEO, Hoby Darling, an e-mail expressing my interest in the company as well ask questions about the future of the brand, products, etc. He replied within a few hours and I was impressed that he reached out to me. For years, we kept in touch given I reside in China and his request to keep him informed about the China market since I have lived in China for the past seven years.
My meeting China management team
Nevertheless, a few months ago Hoby set up a meeting with the Head of China operations so that I can meet with the upper-level management. In my meeting, we talked about the China market, new products, Astro, issues with international margins, and strategy to grow the brand. In China, you know when a brand is doing well when you see knockoffs on every street corner, Skullcandy isn't being knocked off but BEATS is, bittersweet if you think about it. He mentioned in the meeting that their strategy in China is more direct to the consumer and not working with distributors that didn't care about the brand. The manager also mentioned how they work with only specific online retailers and work on a lot of grassroots marketing to get the brand stronger in China. Keep in mind this isn't just Skullcandy but Astro Gaming, which just started selling at the beginning of 2015 given China's ban of video gaming consoles and most, if not all, of the sales for Astro
Sentiment: Strong Buy
During the past week of high volitility the stock pretty much held up. Good sleeper stock... I got back in after getting out..
Sentiment: Strong Buy
The insider trading is a scheduled sell off by Ptarmagin LLC, an irrevocable trust for Rick Alden's spouse and children. Which owns over 4 million shares (over 10%). In the SEC filings on Oct 30th, it states (near the bottom of the filing) there will be scheduled sales of 37,500 shares each Thursday from Sept 10th, 2015 until Sept 8th, 2016 until over 1,900,000 shares are sold. I like Skul candy's financials and think it is a buy with a long hold. But in my opinion, the insider trading will probably put downside pressure on the stock for a while.
I'll keep this short and sweet...Google "Penny Stock 101 org' signup for their free newsletter and get their next trade alert. Come back and thank me tomorrow!
very cool.. no worries likewise! I trade options mostly then when I buy an equity i have a hard time with patients. I still have a some skin in the game mainly because it is really over bought and that is a good long term sign for growth. thanks for the response! have a good one!
Thanks for your kind reply. It is rare to meet a thoughtful investor on these boards. I have done very well with my buy and hold strategy and it's easier on the heart, heh. You sound like you have a different strategy that's working for you and who can argue with success? I wish you the best of luck in all your investments.
I've held it for not very long and think skul is a good equity, it just doesn't have enough volume for a trade equity. It is a good investment. I sold skul and bought nike and made more money in 2 days than I made all month compared to skul. I am sure skul will be fine but higher volume equities have better chance of options to move quickly.
How long did you hold the stock? A year? A month? A day? No one has the patience to buy and hold, which is how most money is made on Wall Street. Today people have no patience for buy and hold. Oh well, their loss.
Yea i like sweeping stuff under the rug as well..Fact of the matter is SKUL should be trading around $3..Look at PacSun if you want..Do some real research (outside of yahoo news)
I agree completely. I know about those who bought at much higher prices, but at these prices this stock seems like a steal to me. Great fundamentals.
And at the current price I can't find that this stock isn't a steal. Sure, if you're looking to make a quick buck, it probably isn't right for you, but if you're seeking a quick return, you probably lose as much as you gain most of the time. However, if you're looking for a stable company with decent annual growth, zero debt, and other equally attractive fundamentals.
Needless to say, I've taken a position with the intention of holding long term. I feel pretty good about it. Hopefully, I'll feel even better in a few years. We'll see.
Good luck longs.
For the record, I bought SKUL at $13 years ago, and sold when it rallied into the 9s last year. I still follow it, but have not bought back in. The problem is that MOST of their products are in a market segment that is largely commoditized. SKUL is not the strongest brand, does not have a lot of market share, and does not appear to have the resources to compete on technology. I like the domestic/Utah story, and the management "connection" to Nike, but I also have (anecdotally) seen their brand lose appeal for young people, and seen them disappear from/or get reduced skus from stores in my local market/Atlanta. So to me, this is still a high risk stock... good potential upside, but downside to zero. Their sales have still not recovered to the levels where they were several years ago. The business appears to have stabilized, but growth is hard to come by, and they have no moat around their business that I can see. Still I'd love to see them succeed... you just have to do your due diligence and take the cheer leading of the bulls on this board with a grain of salt. Nothing wrong with rooting for the home team, but it doesn't mean they are going to win. Good luck to all.