BBG - Billabong International

[LeftRightOut]

I sold out at 11:95, looks like plenty of others did too (as high as 12.19). Satisfied with that, as I bought in at 8.59 at the end of July (almost 40%). I think there is long term upside, but in the mean time, and judging by todays action, I'd rather site on the sidelines on this one.
I'd be looking to buy back in closer to 10.5, depending on what's happening with the greater market.

 

[kermit345]

As there has been no recent discussion for BBG just wondering if anyone has some thoughts as to their potential? my price target for within the next 12 months would be around the $13 mark and I think at $10.50 (basically where they are currently) they have great potential.

Reasonable dividends with a DRP, long term good management and not major debt.

thoughts?

 

[frankie_boy]

BBG back down to prices they were in 2004... People giving up the surfing life

 

[prawn_86]

BBG back down to prices they were in 2004... People giving up the surfing life

So many other surf brands out there, billabong is nothing special. Personally i think surf brands just rip off other brands anyway

 

[drlog]

It's the fundamentals. Simply put, they have stopped growing. If you buy BBG now, you can basically expect a small amount of growth over the coming years.

Although, if the US and Europe were to pick up all of a sudden, BBG would do much better.

 

[buysellmestuffed]

any one with a decent angle on BBG share price or can do a price chart with a range pattern , dividend coming up next month so surely there will be a runup , but the entry price must be near correct .

 

[buysellmestuffed]

As there has been no recent discussion for BBG just wondering if anyone has some thoughts as to their potential? my price target for within the next 12 months would be around the $13 mark and I think at $10.50 (basically where they are currently) they have great potential.

Reasonable dividends with a DRP, long term good management and not major debt.

thoughts?

so is $7 .59 good value then basically if they were so good at $10.50 they must be the ducks guts at $7.59 , why then are they still falling

 

[skyQuake]

so is $7 .59 good value then basically if they were so good at $10.50 they must be the ducks guts at $7.59 , why then are they still falling

By that logic its even better at $5, deep value at $2, and an absolute ripper at $0 while the liquidators move in.

 

[VSntchr]

DEVASTED that I couldn't find a way to short BBG. I was trying to do it two weeks ago with the price around $5...no options and no CFDs (that I could find) made it too hard

With the drop today I wish I looked a bit harder!!!!

 

[skc]

DEVASTED that I couldn't find a way to short BBG. I was trying to do it two weeks ago with the price around $5...no options and no CFDs (that I could find) made it too hard

With the drop today I wish I looked a bit harder!!!!

Get a better provider?! Both IG and MFGlobal had BBG on offer. I always thought BBG was expensive relative to other retailers but was surprised by the fall today.

BBG was the top 10 shorted stock for a long time and such crowded trade isn't usually so profitable. It's even more surprising that it finished on the low for the day when I expected to see some short covering on the results.

Fundamentally EPS 47c against share price of $3.82 at the close = PE ~8. You would think that's close enough to the valuation of most other consumer stocks...

 

[notting]

However, whilst most major retailers are falling over themselves to get internet buying up an running and bricks and mortar look about as enticing as an earthquake, BBG is buying up shops at bargain prices. :bloated:

 

[skc]

However, whilst most major retailers are falling over themselves to get internet buying up an running and bricks and mortar look about as enticing as an earthquake, BBG is buying up shops at bargain prices. :bloated:

Pretty rare to see a strategy unravel in less than a month.

Someone smarter can work out what the sales data table is trying to hide. Why not just show monthly sales change for Sept, Oct and Nov? Instead they chose 3 months (24.7%), 4 months (17.2%) and 5 months (11.7%).

If say 3 months sales last year was 100 (base number) and 4 months 130 (number I made up). Then this year 3 month = 124.7 (100 x 24.7%) and 4 months = 152 (130 x 17.2%). Which means net month 4 = 152-124.7 = 27.3, compared to 30 last year... or a reduction of ~10% for Oct.

I would think BBG is sailing pretty close to their debt convenent with this downgrade... and that's probably why the market's panicking.

 

[Chasero]

Well, looking at that trend,

for the 6 months to Dec average = 5%

for the 7 months to January 2012 = -1%??

That's all I am seeing at the moment, the forecast trend is NEGATIVE.

that explains the dumping today?

 

[skc]

Well, looking at that trend,

for the 6 months to Dec average = 5%

for the 7 months to January 2012 = -1%??

That's all I am seeing at the moment, the forecast trend is NEGATIVE.

that explains the dumping today?

The dumping today is due to the last paragraph... retaining Goldman to advise on capital structure. A dilutive cap raising is likely on the way...

 

[Chasero]

The dumping today is due to the last paragraph... retaining Goldman to advise on capital structure. A dilutive cap raising is likely on the way...

Oh.. possible CR, wow.

Though I bet people looking at BBG sales figures are wondering about similar impacts all around (and retail sector in general), sigh.

 

[skc]

Looking at BBG's balance sheet to 30 Jun it had ~$600m debt (~$450m net of cash) and $164m in deferred payments from acquisitions. With EBITDA downgraded to $70m (or $140m full year) that's debt/EBITDA ~4.5.

I wonder where is the debt convenent level, and what is considered stretched by the market?

When PGA went through a disasterous cap raising it had debt and deferred payments ~$450m and EBITDA ~$46.7m ($75m normalised). So the ratio was 9.5x (or 6x)... i.e. a lot worst than the position BBG is now.

An over-reaction? Hard to tell.

 

[prawn_86]

Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.

Did anyone catch the knife?

 

[Chasero]

Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.

Did anyone catch the knife?

Nope. I was watching BBG with interest.. thought it might be taken over at these levels.

Was never brave enough to hit the buy button when looking at the chart over 5 years...

 

[skc]

Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.

Did anyone catch the knife?

More to do with their Nixon partial sale / JV than the report. That transaction will release $275m for debt reduction and was done at a much higher multiple than BBG is trading.

The transaction indicates the parts are worth much more than the sum. Together with PE rumours and short covering, today's jump is not that dramatic imo.

 

[prawn_86]

More to do with their Nixon partial sale / JV than the report. That transaction will release $275m for debt reduction and was done at a much higher multiple than BBG is trading.

Yeh thats what i figured. Shows someone is actually interested, and they can unlock some value, thus reducing the need for a possible cap raising