Pop quiz: What ASX stock has popped over 100% in the last 30 days?
Certainly, it’s been a promising month, in terms of share performance, for companies from Maverick Drilling and Exploration (MAD.AX) and Buru Energy (BRU.AX), which have risen by 40% and 44%, respectively, against a 7.8% climb in the S&P/ASX 200 index (^AXJO) (ASX:XJO).
Billabong, the big winner
But it turns out that the best way to double your money in the last month was with Billabong (BBG.AX). Shares of the embattled surfwear company have risen 102% in the last 30 days.
The rise in Billabong shares has followed news of the company’s complex refinancing deal with private equity firm Altamont Capital and a consortium of partners, which has seen the company sell its DaKine brand and get a lifeline on its debt, as well as a new CEO in Scott Olivet, a former executive at companies such as Oakley and Nike.
With the deal, Altamont may come to own as much as 40% of Billabong. A last-minute alternative bid from Oaktree Capital Management and Centerbridge Partners, U.S. hedge funds, was turned down.
Yet some controversy remains, as The Australian Financial Review has reported: “Meanwhile, the Takeover Panel is still considering [the] Oaktree and Centerbridge argument that the Altamont deal was ‘uncompetitive and coercive.’ At the centre of their argument is a hefty $65 million break fee as well as a 35 per cent interest rate on a $44 million convertible note agreed to by Billabong and the Altamont consortium.”
The bottom line for Foolish investors
Keep in mind that short-term investing and trying to time the market are fool’s errands at best. Still, those few investors who doubled their money in Billabong shares in the last month will still be laughing all the way to the bank.
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Motley Fool writer/analyst Catherine Baab-Muguira does not own shares in any company mentioned here.