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Skullcandy, Inc. Message Board

  • meifud meifud Feb 8, 2013 11:36 AM Flag

    still 1.6 times book value, virtually no cash, and questionable a/r and inventory values

    need to back out intangibles and goodwill to get true book value, and even that net tangible worth number is unreliable as both the increase in a/r and the discounting of product may lead to a good sized write-off.
    and let's not forget how quickly a low p/e can evaporate in the face of slower growth, higher costs for new product introduction, and discounting of legacy sku's facing competition from all sides
    the stock price had been carried high on a cachet. when that falters, when it is no longer the must have in thing to have, and you have the metrics above, well, this is what happens....return to earth

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    • Indeed a low p/e can evaporate quickly. However, if they can do well in China the growth will still be there. They could also expand the brand to new product categories, as they have been doing with gaming headphones. They sell some apparel through their website, perhaps they could expand on those offerings as well.

    • Very few, if any, of the companies in this sector are priced based on book value. This isn't a banking stock, and it's absurd to price it like one. With regard to cash on the books, what good does it do to leave large amounts of cash setting idle for them? That's exactly what investors are suing Apple for right now! All in all, the earnings are at about $1 per-share. Trading at 5-6x earnings is a pretty steep discount in my view.

      The brand name is a significant aspect of the value of a company in this sector, so I don't feel their goodwill and intangibles are overvalued at all considering the proven earnings power. If revenues and profits saw major decreases I might agree with charge-off's, but that hasn't been the case.


      Sentiment: Buy

    • jbdelane Feb 8, 2013 11:39 AM Flag

      which is why though i am a huge bull at this price level, i succumbed to risk and just sold 4 contracts of puts expiring jan 14 at strike 5$, heres the catch, what price? 1.25

      one dot 25 SON! that's a 3.75 cost basis IF THEY EVEN GET EXERCISED, and if they dont, i keep 1.25/5 = 25% profit

      yeeeeeay boyyy!

      Sentiment: Buy

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