By: Riddhi Vakil, AIM student at Marquette
University
Disclosure: The AIM Equity
Fund currently holds this position. This article was written by myself, and it
expresses my own opinions. I am not receiving compensation for it and I have no
business relationship with any company whose stock is mentioned in this
article.
Summary
•Malibu Boats, Inc. (NASDAQ: MBUU) designs,
manufactures, and markets performance sport boats for water sports, such water
skiing, wakeboarding, and wake surfing, as well as having options for
recreational boating. Founded on November 1, 2013, it is headquartered in
Loudon, Tn.
•In
the last couple of days, they have increased their trading volume which is seen
to many investors as a bullish move. This adds more stability and support for
price advances.
•Acquisition
of Cobalt earlier has shown to significantly greater than they expected in
terms of financial performance.
•The
retail industry has supported the growth for MBUU as there is in increase in
consumer confidence.
•Although
there has been great performance for them domestically, they have had trouble
in international markets.
•MBUU’s
market share has remained steady and they remain to be a leader in performance
sport boats with Cobalt increasing their share in this as well.
Key points: The acquisition of Cobalt has allowed them
to hold the number one market share position in the US under the sterndrive
category, allowing them to be in the “buy” position under many investor reports.
Their return from this acquisition continues to grow at great heights. They are
expecting a higher level of growth than anticipated.
The
consumer discretionary market is booming after increased levels of consumer
confidence and consumer spending due to the increase in wages and the tax cut
policy. MBUU is aimed towards customers who have a higher disposable income and
are willing to spend it on their product. Although this may have not been the
case about ten years ago, it is present now. The economy is booming and is
expected to grow even further through this year.
MBUU
recently has had a huge spike in their trading volume, going from 185,398
shares to 284,414 shares, a significant increase from their usual trading
patterns. This could mean that the company is responding to the market and
economy and showing sign of growth. This could also predict a move in the stock
price that could be beneficial to investors since it is in a bullish manner.
What has the stock done
lately?
After
releasing their earnings statements on November 7th, 2017 for
quarter one FY18 results, there was a spike in the stock price because they had
surpassed their estimates on earnings. With the trading volume increasing,
there has been a decrease in the stock price. With the second quarter FY18
quarterly results coming out in a couple of days, investors are hopeful that
they will beat their estimates.
Past Year Performance: MBUU has had a 43.01% increase in value in
the past 52 weeks, but still remains as a “buy” in the eyes of many analysts
because they seem room for growth from Cobalt.
My Takeaway
MBUU
has seen great heights in their stock in the past year. With the great
acquisition with Cobalt, they have been able to stay on top in the industry.
Market trends have been in favor of their business, and coupled with the
success of their acquisition, they may be able to reach even greater success.
MBUU management remains confident on their positive outlook and their
continuous increase in their financials. This is still a hold for the AIM Funds.