Quiksilver: Montaka’s opportunity
Readers of the Montgomery Global magazine will know that last year we prepared a short thesis on surf wear company, Quiksilver (NYSE: ZQK). Here was a company experiencing declining same store sales, while servicing high levels of debt. Meanwhile the analyst community held unduly optimistic expectations for a rapid recovery in sales and profit margins. Three of four elements of the Montgomery Global Investment Management’s team’s framework for profiting from a deteriorating business were met.
The ‘divergence’ between consensus analyst expectations and the reality we had identified eventually narrowed over time, and this was reflected in the share price declining more than 80 per cent this year.
Most recently Quiksilver filed for Chapter 11 Bankruptcy rendering its equity effectively worthless.
The Montaka Global Fund and the forthcoming Montaka Global Access Fund can provide the benefits of 1) the ability to profit from extraordinary global businesses, 2) the ability to profit from deteriorating businesses, 3) enhanced downside-protection from significantly reduced net exposure to the stock market overall and 4) currency diversification.
To pre-register your interest in learning more about the Montaka Global Access Fund (minimum initial investment $50,000) click here to leave your details.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
John Penn
:
I gather you’ve a bearish view on Australian property Roger – can I ask if you think that any REIT’s look like promising shorts at the moment? :)
Roger Montgomery
:
Our shorting framework requires at least a couple of our four characteristics to be met. There are, on that basis, more promising and rewarding shorts available elsewhere in the world
Gemma Bromham
:
We are interested in the Montaka Fund. Could you forward some paper work. Thankyou.
Roger Montgomery
:
Will do Gemma.
David Szeto
:
Hi Roger, apart from minimum investment amount, is there another difference between the established Montaka Global fund and upcoming Montaka Global Access Fund?
Roger Montgomery
:
Hi David,
Due to the fact the Montaka Global Access Fund will have its own Responsible Entity, Administrator, Custodian and Auditor there may be a pricing difference.
The Montaka Global Access Fund is expected to become one of the largest, if not the largest, individual investors in the established Montaka Global Fund.
John Penn
:
Nice article! Was that published on this site last year as a matter of interest?
Roger Montgomery
:
It was kept internal until just prior to the launch of our Global funds. Brest assured it was written contemporaneously.
John Penn
:
Ok thanks Roger. It would be good to see more articles on shortable stocks, I’m currently shorting a bunch of stocks myself in mining services, oil, banking, media and insurance.
Roger Montgomery
:
Thanks for the good suggestion John
Simon
:
Hi Roger, are we able to transfer money between funds at Fundhost without doing a complete withdrawal?
Kind regards
Simon
Roger Montgomery
:
Wouldn’t that be tremendously convenient! Sadly not, you do need to withdraw and complete another application.
Patrick Poke
:
Excellent result, there’s nothing better than seeing a short file for bankruptcy. Can’t wait to hear more about the Access Fund.
Roger Montgomery
:
Stay tuned Patrick.
Phil WASER
:
Hi Roger, I know that it is early days for the Montaka Global Fund but… How is it performing?
Roger Montgomery
:
Hi phil, Thanks for the enquiry. Investors in the Montaka Global Fund have been fortunate to have had a great start. In July (1st month since inception) the return was 8.4% after all fees and expenses. In August, when markets fell the most since the GFC, the Montaka Global Fund declined just 0.39%. So for the two months since inception, the Montaka Global Fund returned 8.00%. I hope that helps.
Phil WASER
:
Wow! off to a great start – but investing is a journey, not a race. We want to be on this journey – I will be sending my wife’s application just like I did in July for the Montgomery Global Fund. Thanks to all at team Montgomery – one of our sentimental favourite investment partners…
Roger Montgomery
:
Thanks for the encouraging words Phil.