Bull of the Day: Skullcandy (SKUL)

Skullcandy, Inc. (SKUL - Snapshot Report) is cashing in on the fast growing headphone market. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits in both 2015 and 2016.

Skullcandy makes audio and gaming headphones and other accessories under the Skullcandy, Astro Gaming and 2XL brands.

The brand is popular with youth culture and it markets Skullcandy as a lifestyle. It sells in about 80 countries worldwide through a variety of channels like Target and specialty retailers.If you're seen someone walking down the street with earbuds in their ears, it's likely that they may be using a Skullcandy product.

Another Beat in Q4

On Mar 5, Skullcandy reported fourth quarter and full year results.

Sales jumped 34% to $96.8 million from $72.2 million in the fourth quarter with domestic net sales rising 37% to $70.6 million. International sales were also strong, rising 27% to #26.3 million year over year.

It was another earnings beat for the company which hasn't missed since its 2011 IPO.

For the full year, sales rose 18% to $247.8 million from $210.1 million in 2013.

Bullish on 2015

"2014 marked an important inflection point in the evolution of our company," said Hoby Darling, President and Chief Executive Officer.Skullcandy is seeing positive trends for 2015.

"The business is becoming more diversified, our teams are aligned and hungry for success, and we have a clearly defined roadmap for the future that is working. The foundations have been set for 2015 and we are on full attack," he added.

The analysts are bullish too.

They expect big earnings growth in 2015 of 47%. They see the strength continuing into 2016 with further earnings growth of 32%.

What's the Catch?

Shares aren't exactly cheap. Skullcandy trades with a forward P/E of 28 versus the average of the S&P 500 of 18.

But it has an attractive price-to-book ratio of 2.0 and a price-to-sales ratio of just 1.3 so not all of its valuation fundamentals are outrageous.

For investors looking for a way to play the growing headphone market, Skullcandy should be on the short list.

by Tracey Ryniec 

Source:http://www.zacks.com/commentary/43621/bull-of-the-day-skullcandy-skul

Avoid Coca-Cola, Buy Monster or Dr Pepper for More Satisfying Profit

Stocks in this article: DPS KO GMCR MNST PBJ PEP SPX

NEW YORK (TheStreet) -- Global beverage giant Coca-Cola (KO - Get Report) will report fourth-quarter and full-year results Tuesday before the opening bell. With just 2% stock gains in 2014 compared with 14% gains for rival PepsiCo (PEP - Get Report) , Coca-Cola shareholders must be wondering why they hang around.

Coca-Cola shares are down 1.37% for the year to date, trailing the broader averages, which have traded flat. By contrast PepsiCo shares are up 2.5%. But this is no taste test. Coke is going flat and needs something to put the fizz back.

In the meantime, there are other places for your investment dollars, specifically two companies in which Coke has bought major stakes -- Monster Beverage (MNST) and Keurig Green Mountain Coffee (GMCR) .

Must Read: 16 Rock-Solid Dividend Stocks With 50 Years of Increasing Dividends and Market-Beating Performance

Coke, Atlanta, spent $2.15 billion for a 17% stake in Monster Beverage (MNST)  last year. This was done after it bought an additional 6% stake in Keurig Green Mountain (GMCR) last May, upping its holdings to 16% and becoming Keurig Green Mountain's top owner.

Those moves have paid off. Keurig Green Mountain shares soared in 2014 more than 82%, while Monster stock has added more than 60% gains. Unfortunately, beyond Coca-Cola's quarterly dividend yield of 2.93%, investors didn't see any of those gains. While Coca-Cola stock is languishing in negative territory in 2015, Monster Beverage shares are up 8% for the year to date, beating the broader averages.
So it makes more sense for Coca-Cola investors to buy shares in Monster.

Besides, Coca-Cola shares are not cheap. They trade at 23 times trailing earnings, which is three points higher than the average price to earnings ratio of companies in the S&P 500 (SPX) . it is also three points higher than PowerShares Dynamic Food & Beverage Portfolio (PBJ) , which includes PepsiCo, Monster Beverage and Dr Pepper Snapple (DPS) .

Dr. Pepper Snapple's shares are up nearly 9% for the year to date with a P/E ratio almost two points lower than Coca-Cola. Coke's higher P/E implies Wall Street still expects the company to turn things around and outgrow its peers -- something it hasn't been able to do in almost two years.

For the quarter ending in December, Coke is expected to report 42 cents per share in earnings on revenue of $10.76 billion, representing year-over-year declines of 8% and 2.5%, respectively. For the full-year, earnings are projected to decline 2% year over year to $2.03 per share, while revenue is expected to be $45.9 billion, down 2% year over year.

Source:http://www.thestreet.com/story/13038471/1/avoid-coca-cola-buy-monster-or-dr-pepper-for-more-satisfying-profit.html

BYRichard Saintvilus