Are you a surfer dude? Whether you ride the waves or just appreciate the youthful lifestyle of boarders, maybe Quiksilver stock is for you. Take these thoughts into account when considering this stock.

1. Quiksilver has agreed to buy Groupe Rossignol, the prominent French skiing company, for $320 million. This could help put Quiksilver in the competitive ranks with other sport brands such as Nike.
2. Quiksilver is strong and consistent with higher overall average growth than the apparel and accessories industry.
3. With solid market share, Quiksilver is the seventh largest company in the industry, with a market cap of roughly $1.9 billion.
4. European sales and international licensees continue to grow, promising further growth internationally.
5. People always need clothing and shoes, which creates a high demand for products regardless of the economy. This offers some stability to Quiksilver stock.

1. Consumer tastes are subject to fads and can change on a whim, impacting the clothing business for retailers like Quiksilver.
2. How long can it keep growing? At some point Quiksilver's core business will need to be altered to sustain the growth rate it has achieved over the past several years.
3. The price earnings-to-growth (PEG) ratio is approximately 1.07. A ratio exceeding 1.0 is usually indication that a stock might be somewhat overvalued in the current market.
4. Industry market share is not growing. While people always need clothes, the amount they need to buy will not increase by much overall.
5. Long-term debt has increased a great deal over the past few years, which is something to keep an eye on.

Living in Southern California for the last decade, I have learned two things: the girls are really hot and they like guys who wear surf wear. No brand better epitomizes surf wear than Quiksilver. Because of their ownership in brands such as Roxy, Raisins and the recently acquired DC Shoes, Quiksilver is bigger than meets the eye.

1. The company has a tremendous following, from teenagers to post graduates. Everyone who wears their clothing reflects the core values of Quiksilver: simple, comfortable and expressive.
2. Quiksilver appeals to surfers and skateboarders specifically, and the popularity of these lifestyle sports shows no signs of diminishing (at least not in my former high school).
3. The company has had continual waves of growth with over $1.2 billion in sales reported for 2004.
4. New retail stores providing Quiksilver gear exclusively are showing exceptional early results. Look for them to build more, moving into the Midwest territories soon.
5. Quiksilver was hip ten years ago and continues to be cool today.

1. I will not invest in any company with 500% growth over the past five years. Not even Microsoft.
2. Retailers are enjoying the fact that consumers are spending more money on clothes than ever before. Too bad it's all borrowed money (debt) and not money from savings. Ultimately, the consumers are going to get in way over their heads.
3. Insiders at Quiksilver are selling stock just as quickly as teenage girls buy clothes. In early 2004, there was heavy insider selling, reportedly the highest in five years, with the CEO selling in the range of $10 million of his own shares in March last year.
4. Every analyst on Wall Street loves it, so the stock is considered a darling. Looking at darling stock histories, more often than not, they prove not so great.
5. Beachwear is so bland. I live thirteen blocks from the ocean and I promise you, wearing Quiksilver clothes won't get you any closer to surfing the waves.

Editor's Note: The opinions expressed here are not necessarily that of the publisher and/or distributors of the magazine. All analysis is meant for educational purposes only and not as financial advice. You should not make decisions based on information contained in brass|MAGAZINE without the advice of a qualified professional.

Sources: moneycentral.msn.com; quiksilver.com, netscape5.marketwatch.com; reuters.com; hoovers.com