How long have you held Billabong?

Around 12 months.

What do you like about it?

Billabong is an excellent brand with solid consumer recognition in its desired target market. Its large revenue base does not need to grow to achieve significant returns for shareholders. Billabong has a great opportunity to benefit from a weaker Australian dollar, and it is close to being debt free.

Billabong (BBG)

Source: Yahoo!7 Finance, 4 December 2014

How is it better than its competitors?

Billabong owns its brand and is not a re-seller of other companies’ products. It is a global brand with significant scale.

What do you like about its management?

Billabong has a proven management team that has turned around a number of companies such as Eddie Bauer, and Bath & Body Works.

What is your target price on Billabong?

$1.20

At what point would you sell it?

When the cost-out strategy in Billabong has completely unfolded.

How much has it added to your overall portfolio over the last 12 months?

Billabong has been a significant contributor to our portfolio performance over the last 12 months.

Is it a liquid stock?

Yes.

Where do you see the value?

Billabong’s value is in the ability of its management team to take the $1 billion in revenue and focus on operational and productivity drivers to potentially get the company back to the +9% NPAT margins that once made Billabong the largest retailer in Australia.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.