ZQK

[David Randolph]

I'm listening to ZQK's "ICR XChange Conference" but I'm not really thinking about ZQK ... I'm thinking of ONSM, because they're showing slides and films at the presentation, and all I can do is hear the sound !

They should make it all using video on the web, not just a webcast. Anyway, let's leave ONSM for its thread.

ZQK didn't do much today and I have nothing new to add to the fundamental picture. I'll continue holding ZQK.

[David Randolph]

Nothing new on ZQK today, I'm running late on these updates today, I'll just say I'll continue holding and leave the updated chart:

[Se7en]

QUIKSILVER INC Files SEC form 10-K, Annual Report

http://biz.yahoo.com/e/070112/zqk10-k.html

[David Randolph]

QUIKSILVER INC Files SEC form 10-K, Annual Report

http://biz.yahoo.com/e/070112/zqk10-k.html

Yes, we'll study the 10-K in detail over the upcoming updates, thanks Se7en

I think it is interesting to show the product mix they're selling at Quiksilver:



I think wintersports and golf will be two of the fastest growing sports in the world for the next 10 years, so I'm glad to see wintersports now accounts for 18% of ZQK's revenues (being the largest component) and golf equipment represents 7% of total sales.

Technically the stock may retest the 50 days moving average at $14.81 or it may bounce right away, because volume picked up considerably on Friday and the stock ended with a doji candle, which shows indecision and perhaps a change in the short term trend. The stock has been consolidating for about a month, it is getting ready for a push to new highs above $16. 

[David Randolph]

Gee, I'm glad I wasn't around to see ZQK down 6.5% on the day

I'm glad it recovered towards the end of the session, leaving quite a bullish candlestick on the chart. The gap between $14.58 and $14.87 was closed, the stock can and should move up now.

I'll keep on holding ZQK.

[David Randolph]

My short term timing on ZQK was poor, but the overall trend remains bullish and fundamentals look sound, as you can read on the rest of this thread. I'll keep holding ZQK.

[David Randolph]

ZQK recovered some ground yesterday. This is a great stock to own for the long term, but it isn't a fast mover, we need to be patient with it. I'll be patient and keep on holding ZQK.

I have nothing to add to what I said on this previous update. Although ZQK is down some from my buying price, I'll be patient with it, as I expect it to rise between 25 and 35% a year going forward.

[David Randolph]

Nothing new on ZQK, I'll hold.

[David Randolph]

There was a news release yesterday:

• Quiksilver and Plantronics Announce Partnership and New Limited Edition Sports Collection
PR Newswire (Mon 11:00am)

Positive but irrelevant news in share price terms. The stock is touching some horizontal supports now. I consider it cheap with an estimated 2007 earnings multiple of 12.7. Quiksilver is also a business that I know well and see growing 30% a year going forward, as it has been happening for the last several years.

I'll HOLD ZQK.

[David Randolph]

There was this news out from ZQK:

• Quiksilver Inc. Hires New Head of Rossignol Apparel Business for Americas
Business Wire (Tue 8:00am)

QuikSilver has 9,200 employees, Jose Garcia is just one more (even though he's coming for the management level), so obviously this isn't a market moving news.

There was also this article that partially explains my bullishness on ZQK:

10:00am 01/23/07 Outlook for Winter Sports Industry Favors Steady Growth, Says Mercanti Report - BusinessWire

Besides this, my ZQK long term estimate sees 33% average annual growth for the next 10 years, the stock is trading with a forward earnings multiple of 13 and a price to sales ratio of just 0.76.

I'll keep holding ZQK.

[David Randolph]

ZQK is that mammoth stock that moves slowly and recently it has been somewhat weak, as I'm losing 9.75% on this trade.

Anyway, I see it's long term fundamental growth of 33% a year continuing, so I have no reason to sell. ZQK is already big enough not to depend on a few men's will (it has 9,200 employees, $1.79 M market cap), so that diminishes risk.

Also, the company has value added brands, like QuikSilver and Roxy, so, their products aren't commodities. Another plus for this company is their recent bet on winter sports (particularly snowboarding) and golf, as they acquired  Rossignol, areas where I expect strong growth for the next 10 or 20 years.

I'll keep holding ZQK as a long term investment. 

[David Randolph]

I don't think ZQK will go much lower than current levels. Perhaps it will establish a trading range between $13.8 and $16 for some time. But I don't see its fundamentals deteriorating, quite the contrary.

The lower prices are attracting buyers, as you can see by the increase in volume.

I'll keep holding ZQK.

[David Randolph]

Finally we had a bounce on ZQK, maybe when least expected from a technical standpoint. I'll keep holding ZQK.

[David Randolph]

It would be nice if ZQK were able to close back above that broken ascending trendline, but I'll take yesterday's 0.63% bounce with a smile.

Perhaps ZQK will spend some time on a lateral trend between $13.8 and $16, before breaking out to new all time highs. I'll give it time and will keep holding the stock. 

[David Randolph]

There was a press release out yesterday from QuikSilver, but it isn't relevant in terms of share price:

• Quiksilver, Inc. Athletes Perform at High Level at 2007 Winter X Games XI
Business Wire (Tue 8:00am)

The stock closed unchanged on low volume, I'll continue holding.