Figured I would throw this one out as this has been a really great board as of late and way better than most on Yahoo. As a new investor in SKUL this one actually reminds me a lot of one I have been following for almost 7 years and that's Monster Beverages (MNST) which used to be called Hansen's. When I read some of the comments around here I cant help but seeing a lot of parallels. 5 Years ago I feel like I was in the same boat - here was a category that I felt like was not only new (Energy drinks) but was literally exploding and Monster was a clear leader in the space.
And all I had 5 years ago was frustration. People calling energy drinks a fad - People saying no one would pay for an energy drink when they were being knocked off and undercut by a zillion cheaper options at every 7-11. People saying the young market that would fuel business was too fickle and would change their tastes on a dime.
And if I had to do it all over again, I would have just stopped whining and complaining on the message boards and to friends and just shut up and bought as much as I could at 27 and just been patient. Yup I was buying it from 22 to 27 dollars a share - Yesterday it traded at 57 .... after just completing a 2 for 1 split - so basically 114 - a almost 5 bagger in 5 years for a product that I use every day.
The companies I think are quite similar - they both are targeting the same demos and trying to build a very specific brand with unique products and packaging and a very specific marketing angle - In my mind the equation is simple - headphones are now going to be a defacto big growth category from here on out thanks to all the devices and smartphones. And even with cheap crappy ones, there will be a segment that wants higher quality headphones and also wants the fashion and identity that comes with cooler headphones.
If I wanted to buy the true best in breed maybe I would buy Beats - but I can't buy them just like I couldn't buy redbull at the time - Is skullcandy going to grow and execute as well as Monster has in the last 5 years? I sure hope so but I have no idea. Monster had its stumbles along the way with lawsuits over improper stock options (Monster Cable Lawsuit??) and bad investments in Auction rate securities. And it had earnings reports that I thought looked great but disappointed some analysts or some whisper numbers. But over the last 2 to 3 years once they got their distribution in line the stock keep gaining steam until it literally exploded in the last year - Now it sports a 10 billion dollar market cap and trades over 5 times sales -
I don't know if Skullcandy has the goods to make that happen - but I am willing to give them a year to find out - Right now I think its fairly undervalued, but stocks can always stay that way for a looooong time. And for sure the HUGE short interest makes a small fry like me nervous. But I think a lot of the same ideas are there. Who would have thought 3 years ago that 300$ headphones would actually be a legitimate biz category? The last article I read said that sales of headphones over 100$ doubled last year - now that's an easy double 3% to 6% - but that's what I'm here for. When I try and pick the direction of the market I normally lose. When I try and pick stocks based on the direction of trends in society that I see like energy drinks or caffine in general (sbux) or the internet, I seem to do pretty darn good.
Anyway I am still new around these parts, and don't want you to think i am here shilling for MNST - i don't own a share of the thing for the 1st time in 4 years... too expensive. Hoping I found the next monster right here...
Thanks for reading... and good luck to all -
Can someone help with checking my thinking here:
Shares Outstanding = 27.2M
Institutions & Mutual Funds = about 14.2M ?
Major Direct Holders = 10.2M
Insiders (3.42%) = 0.9M
27.2 - 14.2 - 10.2 - 0.9 = 1.9M shares in small hands.
Major Direct Holders:
PTARMIGAN, LLC 6,766,950 Jul 25, 2011
GOODE SKULLCANDY HOLDINGS, LLC 2,158,283 Jul 25, 2011
ANDRUS JEREMY 209,313 Jul 25, 2011
ALDEN RICK 929,807 Jul 25, 2011
WARNOCK GREG 142,850 Jul 25, 2011
These guys are the 800# gorrillas? The Warren Buffets of SKUL, correct? Can anybody give me the story on these guys?
Founder Rick Alden is a crazy bull in a china shop who was forcefully removed from Skullcandy, he serves on the board but hated by all. Jeremy Andrus is the brains behind it all. One thing in common for nearly all the exec team is they are all Mormon. They have heavy backing by the LDS Church as well.
If Outstanding = 27.2 and float = 8.27 then restricted shares = 27.2 - 8.27 = 18.93.
If Majors and insiders = 10.2 + 0.9 = 11.1 are restricted shares that still leaves:
18.93 - 11.1 = 7.83 restricted.
Where are these restricted shares?
Excellent post. Thanks.
When I first saw the brand I was struck with the marketing genious. I would love nothing more than to get into this at a low-risk entry and ride it up like the monstor stock MNST. Set it and forget it.
i agree the board has got more educational. and while i may disagree with onepoint, he has gotten everyone to chime in.
i had a similiar situation and i guess i'm showing some age. i bought harley davidson as an ipo back in 1986. paid $11 only to watch it go to 7 and spend a year below the ipo. back then harleys were dogs, jap. bikes were king. i eventually sold too soon as harley has gone to 60 and split at least 5 times since.