Could Quiksilver Inc’s Penny Stock ZQK Turn A Quik Buck?

Penny Stock Trading could heat up Tuesday for the surf, skate and other sport-inspired clothing and accessories maker Quiksilver Inc. (NYSE: ZQK). ZQK earnings for the quarter ended April 30 are due out any day now, Tuesday according to Yahoo Finance. The Company is looking to redeem itself after it posted a loss in the last quarter after having a two consecutive profitable quarters. ZQK stock, currently $2.81, is getting cheap as it continues the slide it started in late-March.

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ZQK Stock Chart:

Market Cap: 462.29M

Forward P/E
(fye Oct 31, 2013): 8.26
Price/Sales (ttm): 0.23
Price/Book (mrq): 0.79

52-Week High
(Jul 21, 2011): 5.58
52-Week Low
(Oct 3, 2011): 2.61
50-Day Moving Avg: 3.28
200-Day Moving Avg: 3.77
Avg Vol (3 month): 1,172,700
Avg Vol (10 day): 967,556
Shares Outstanding: 164.52M
Float: 114.90M
% Held by Insiders: 24.03%
% Held by Institutions: 56.90%
Shares Short
(as of May 15, 2012): 6.13M

The share price of ZQK has dropped -42.54% from its year-to-date high of $4.89. As of the close of trading on Friday, Quiksilver’s stock closed at $2.81, up 1.44% on volume of 902,695 shares.  The current PPS is -14.39% below the 50 day moving average, -25.49% below the 200 day moving average, -49.64% the 52 week high of $5.58 and just 7.66% above the 52 week high of $2.61.

Regardless of if Quiksilver is or is not reporting Q2 earnings as Yahoo Finance has them scheduled for on the earnings calendar, traders unfamiliar with the penny stock should take not of the Suport levels and Resistance Points. The 1st and 2nd Support Levels are   2.76 and 2.72, respectively. Anything in this range would make for a good entry level for a long position. If ZQK can break the 1st Resistance Point of 2.86 and close on volume above 1.2 milion, then the 2nd 1st Resistance Point of 2.92 can be tested.

ZQK Recent Ratings History

• On April 11th, ZQK was downgraded by TheStreet Ratings from “hold” to “sell“. • On April 13th, analysts at Janney Montgomery Scott initiated coverage on ZQK setting a “neutral” rating on the stock.

Changes since the Q1 Filing: Richard Shields was appointed to serve as ZQK‘s CFO effective May 11, 2012. Mr. Shields joins Quiksilver from Oakley, Inc., a global designer, manufacturer and distributor of performance eyewear, as well as apparel, footwear and accessories, where he had served as CFO since 2005.

About Quiksilver Inc.

Quiksilver Inc. is a globally diversified company that designs, develops and distributes branded apparel, footwear, accessories and related products, catering to the casual, youth lifestyle associated with the sports of surfing, skateboarding and snowboarding. The Company markets products across their three core brands, Quiksilver, Roxy and DC, which each target a distinct segment of the action sports market, as well as several smaller brands. The Company’s products, designed by boardriders for boardriders and consumers aspiring to the action sports lifestyle, combine over 41 years of brand heritage, authenticity and design experience with the latest technical performance innovations available in the marketplace.

Quiksilver began operations in 1976 as a California company making boardshorts for surfers in the U.S. under a license agreement with the Quiksilver brand founders in Australia. Their product offerings expanded in the 1980’s as the Company expanded Their distribution channels. After going public in 1986 and purchasing the rights to the Quiksilver brand in the U.S., they further expanded their product offerings and began to diversify.

In 1991, Quiksilver acquired the European licensee of Quiksilver and introduced Roxy, their surf brand for teenage girls. They also expanded demographically in the 1990’s by adding products for boys, girls, toddlers and men, and they introduced their proprietary retail store concept that displays the heritage and products of Quiksilver and Roxy. In 2000, they acquired the international Quiksilver and Roxy trademarks, and in 2002, they acquired their licensees in Australia and Japan. In 2004, they acquired DC Shoes, Inc. to expand their presence in action sports inspired footwear.

Quiksilver’s products are sold in over 90 countries in a wide range of distribution channels, including surf shops, skate shops, snow shops, specialty stores, select department stores, 770 owned or licensed company stores and over the internet. In fiscal 2011, more than 65% of their revenue was generated outside of the U.S. Their corporate and Americas’ headquarters is in Huntington Beach, California, while their European headquarters is in St. Jean de Luz, France, and their Asia/Pacific headquarters is in Torquay, Australia.

Bottom Line: ZQK should be on the list of penny stocks to watch for those who are looking for a long position. Expecting to see a 20% or even 10% jump in price is unlikely unless the upcoming earnings report comes in with revenues greater than $600M and EPS above .11. The Company reported almost $2 Billion in revenue for 2011 so growth is going to become a factor at some point for the apparel maker.

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