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Skullcandy, Inc. (SKUL) Message Board

  • michaelsistowicz michaelsistowicz Mar 7, 2013 12:40 PM Flag

    ZAGG

    It popped on no news today. It seems to have similar sentiment as SKUL (although it gets a 16 P/E)...

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    • althought the stated P/E is correct above... one could contest this ratio but you need to look under the hood. Under new SEC rules companies are being forced to clean up the balance sheet. for example if a company makes an aquisition with a 20 mil price tag and the value of the total company after aquisition is 100 mil the aquisition represents 20% of the total value... if the value of the total company falls to 50 mil that woudl mean the aquisition represents 40% of the revised value so the SEC forces a write down of Goodwill to realing that purchase to remain at 20% of the total company valuation.. in this scenario the company would right down goodwill by 10 mil which then leaves a book value if the aqusitio at 10 mil (20 mil buyout less 10 mil write down) this revised value of 10 mil on the books represents 20% of the total company value... this is important to know and understand. In Zaggs case they wrote down a non cash transaction by 11 million which does impact GAAP numbers and hence the 16 PE for zagg... otherwise zagg had a blow out quarter beeting estimates by 10 cents per share and blow out year. If you exclude this one time no cash transaction PE is around 7 now and forward looking trading at 7 as well... indicating great value potential... zagg also raised guidnace for next year which exluded any impact that could be realized by a number of new products.

      I just wanted to clarify the PE .. I am watching SKUL but not a buyer as yet. Good luck to all you longs and your earnings call later this afternoon

 
SKUL
7.19-0.04(-0.55%)Jul 25 4:00 PMEDT

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