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ZQK: Taking Profits But Looking To Re-Enter On Retail Sector Sell-Off Around 4Q Reporting

|Includes: Quiksilver, Inc. (ZQK)

I bought ZQK shares on January 9 after I (admittedly, belatedly) noticed that Bob McKnight had resigned as CEO and was to be replaced by former Disney exec Andy Mooney. I believe there's a long-term growth story at ZQK that can play out over the next few years as the company works to heal its severely wounded balance sheet and improve EBIT margins from abysmal levels, and I don't think that the company's current valuation is overly-stretched in light of the EBIT margin upside potential. However, with the stock up 20% since 1/9 and no upcoming data point until the next earnings report on 3/7, I am taking profits and looking to re-enter as I believe the retail space in general, and ZQK along with it, is likely to pull-back in February as early reporters release 4Q and Holiday results and give forward guidance.

I'll be watching for any lower entry point as I still believe in the long-term recovery story with a new CEO and sans Rossignol.

Disclosure: I am long ZQK.

Additional disclosure: But am planning to exit my position today.