Better early than late usually works out to be the best strategy when trading penny stocks for the biggest possible gains. However, when we advised readers to add the NYSE penny stock of outdoor apparel retailer Quiksilver Inc. (ZQK) to the list, seems we were a bit too early. Thinking that the brakes would finally kick in and stop ZQK stock from sliding some time in June, it took until just after the Independence Day celebrations for the share price to finally find the bottom at $2.09. Now that Wall Street analysts, like Stifel Nicolaus, are changing their outlook from a “hold” rating to a “buy” rating and giving them a $6.00 price target, are you that one trader who is sitting there up 79% right now?
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ZQK Stock Chart
Market Cap: 619.26M
Close: 3.76, up 0.36 (10.59%)
Average Trade Size: 258
Issued and Outstanding: 165,926,795
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After reporting revenues last month that were slightly better than the same three and nine month periods the year before, $512,439 and $1,454,273, respectively versus $503,317 and $1,407,860, respectively, even Quiksilver’s CEO, Robert McKnight, celebrated the performance of ZQK stock by cashing in 20,000 shares at an average of $3.265 or roughly $65,300. (see here) You can hardly call it a sell off considering he still owns over 60 million shares.
Yet the bullish sentiment towards Quiksilver has been catching on now since prior to their most recent Q filing. (see here)
While some of the outdoor apparel companies top competitor’s are seeing slow growth and their stock prices fluttering lower in recent months, Quiksilver has also shown some signs of slower sales with inventories having increased by roughy $50,000 as of July 31, 2012 compared to October 31, 2011. However, the Company has shown growth in all its regions, expect for Europe which has been the hardest hit region by all retail apparel companies.
With Quiksilver’s earnings 4¢ above the analysts’ consensus of 5¢, and revenue up 2% year over year, even analysts at Credit Suisse increased their target price on ZQK stock to $4. All in all, if you took ZQK for its face value in June and didn’t catch the July bottom, you’re still up over $1.25, 50%, which isn’t growing on trees these days.
About ZQK Stock
Quiksilver Inc. operates in the outdoor market of the sporting goods industry in which they design, develop and distribute branded apparel, footwear, accessories and related products. Over the past 42 years, Quiksilver has established itself as a global company representing the casual, youth lifestyle associated with boardriding sports.
Click here to view the SEC filings for ZQK.
Bottom Line: ZQK was one of those NYSE penny stocks that was too good to pass up in June which is why we had to cover it. Based on the performance of ZQK stock and the emails received in the past two weeks when the share price has really taken off, it’s a fair assumption to think we know more than just OTC listed penny stocks.
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