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Noah Blaustein

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  • Quiksilver's Potential - The SG&A Driver [View article]
    Oscar's blurb on the stock coupled with my detailed knowledge of their product is what got me interested in the stock. But you need to be careful, when Oscar mentioned the stock only Mooney and Sheilds had been in place, but no plan and no guidance. If they can't fix the rapidly deteriorating gross margin and only drop the SGA 300 basis points per their plan, then Quiksilver is an extremely expensive and dangerous stock. A lot rides on these next quarters because if they can't follow through on their guidance, the investment community could lose confidence and flee. Keep in mind too that they're only guiding for 150 m EBITDA by 2016 - a number Osacr didn't have yet - and they still have a 60m interest expense and 780m in long term debt to deal with.
    Jun 10, 2013. 07:13 PM | Likes Like |Link to Comment
  • Quiksilver's Potential - The SG&A Driver [View article]
    I thought about shorting ZQK based on their plan but after listening to the earnings call, its hard to say. I did dump the few shares I had when the stock was up around eight. The key take aways from the call are that they do expect revenue to deteriorate so they're focusing on what they can control and hedging on revenue growth by only modeling for a CAGR of 2.5%. EBITDA has now been down for ten quarters and gross margin has really deteriorated. If their plan works and they can restore gross margin to the low 50's and drop SG&A to the high 30's (low 40's including marketing) then they're looking pretty good. But those are a lot of if's. I also think they're licensing plan, if not executed carefully, has the potential to drive away core customers by creating more cheap schemata. If they miss further in the third and fourth quarters people will lose faith and this stock will sink. Even if you believe their plan, I wouldn't touch this stock unless it is under say $4.40, still expensive now but reasonably cheap (EV/EBIT of 5.6) if you're holding through 2016.
    Jun 10, 2013. 06:58 PM | Likes Like |Link to Comment
  • Quiksilver's Potential - The SG&A Driver [View article]
    My first thought was that McNight might want to sell but that 788m million of debt doesn't fit the private equity model of leveraging up a clean balance sheet very neatly. A Nike (they already own Hurley) could absorb that debt easily but too many major retailers already have a stake in the industry. Its hard to know what Mcknight is thinking, I mean just looking at the sku's it looks like he's been checked out for years. (Why does Quicksilver sell iphone cases in the Apple store?)

    Since the article was submitted the new management disclosed target numbers and the math doesn't ad up very well. If they could drop the SG&A as I outlined in the article, they would become very attractive but the numbers in their press release just don't smell like honey.
    May 19, 2013. 04:02 PM | Likes Like |Link to Comment