A friend just sent me a link to this article — ‘Bicycle sales boom in US amid rising gas prices‘. Here’s the crux of the article:
More bicycles than cars have been sold in the United States over the past 12 months, with rising gas prices prompting commuters to opt for two wheels instead of four.
Not since the oil crisis of 1973 have bicycles sold in such big numbers, according to Tim Blumenthal, executive director of Bikes Belong, an industry association.
“Bicycle sales are near an all-time high with 19 million sold last year — close to the 20 million sold during the oil embargo in the early 1970s,” said Blumenthal, whose association is based in Boulder in the western state of Colorado.
The US Chamber of Commerce says more bicycles have been sold than cars over the past 12 months.
So of course the first thing I did was go look up the stock of Cannondale. But much to my surprise they’re no longer trading on the Nasdaq and are now listed on the pink sheets (ugh!). I haven’t been able to think of nor find any other bike company stocks. Does anybody know of any pure plays?
It’s not a pure play re: bikes but Dorel Industricties is listed on NASDAQ and the cdn. TSX
http://www.dorel.com/investor.htm
Well, for name recognition and sales volume, wish there were a pure play for Schwinn. However, they were bought by Pacific Coast Cycle after their bankruptcy. Pacific Coast was recently purchased by Dorel Industries (DIIB – Nasdaq). Can’t ascertain how much of Dorel’s business the bike brands comprise, but their chart sure looks ugly! Maybe the bike sales news will have some effect on it.
Well, you’ve got the now bankrupt Huffy bicycle company. They’re supposed to come out of bankruptcy this October.
You also have Dorel (DIIB) which owns Pacific Cycle which produces Schwinn, GT Bicycle, Mongoose, Pacific, Murray, etc.
That’s the only bike companies I could find. Also, something to think about…motorcycle and moped companies are also seeing growth due to rising gas costs. Especially scooter/moped companies. I have a view of the motorcycle parking lot from my office. And over the past 5 years…they’ve had to expand the lot a couple of times due to the growth.
I think Vespa (scooter) is owned by Piaagio which is controlled by Immsi SPA. In which Immsi is traded on the Milan Stock Exchange.
Of course, I know nothing about any of this…just bored on a Sunday morning and read your post.
MT
Schwinn, Mongoose, Huffy, Roadmaster, etc. are low-end, low-quality, imported ‘crap’ bikes. That’s not where the money is.
I’ve been a regular bike commuter for 3 years and it’s the high end where it’s at. Bikes that cost at least $1,000 each. Middle-aged people with disposable incomes are turning to biking to burn off bulging midsections, have some fun and now, lately, save on high gasoline prices.
I’m not aware of a direct play on high-end, high-dollar, high-profit bikes. Trek, LeMond, Specialized, Bianchi, Jamis, Giant, etc. seem to be privately held.
One indirect play is carbon fiber. The high-end bikes are moving in a big way to carbon fiber for use in frames, forks, handlebars, seat posts due to CF’s superior strength-to-weight ratio. Zoltek (ZOLT) manufactures raw carbon fiber stock. There is a worldwide shortage of CF due to its increasing use in airplanes, spacecraft, cars, and now bikes. SGL Carbon AG of Germany (SGG), is another.
ZOLT just had a major breakout. SGG is trying come off a long base.
The folks who ride the high-end, high-dollar bikes are certainly the middle-aged folks with disposable incomes you describe. However, they’re also the ones who ride for recreation, not out of necessity. The chance of a significant portion of that group leaving the Porsche in the garage solely to save money on gas is very low. The reasons they ride (or don’t) haven’t changed much.
OTOH, the pizza delivery guy who just saw half his tips for the month disappear into the tank of his ’93 Escort… he may be biking to class in order to save money for Ramen noodles. He and many, many like him will be shopping for those imported ‘crap’ bikes, which although a couple pounds heavier and without the cache’, will carry their skinny little butts around as reliably as anything else on two wheels.
Cheers… enjoying the discussion. Best of luck with the trading.
If you want a pure play, Dorel is out. Bikes are just a fraction of their business, which also includes ready-to-assemble furniture, household products, and the like. If you want to avoid bankruptcy, both Huffy and Cannondale are out.
The best pure play imo is Shimano (SHMDF.PK). Shimano is a Japanese manufacturer of bicycle derailleurs, gears, etc. If you paid more than a few hundred dollars for your bike, you probably have Shimano components. The downside? It is thinly traded here in the States and is not a full SEC filer.
If you want a pure play, Dorel is out. Bikes are just a fraction of their business, which also includes ready-to-assemble furniture, household products, and the like. If you want to avoid bankruptcy, both Huffy and Cannondale are out.
The best pure play imo is Shimano (SHMDF.PK). Shimano is a Japanese manufacturer of bicycle derailleurs, gears, etc. If you paid more than a few hundred dollars for your bike, you probably have Shimano components. The downside? It is thinly traded here in the States and is not a full SEC filer.
Shimano would be a great pure play. 76% of income from bike components. They build components for clunkers as well as high end custom bikes. Campagnolo from Italy (their only competitor) looks like its private. Looked at Shimano 04 annual report briefly – big jump in gross sales and net income from 03 to 04. No data 05. Trades on the Niekki. hmmm.
Mike,
Here is a site that lists all bicycle manufacturers.
http://www.bikesutra.com/manatoi.html
Thanks for all the comments/help folks. (I’m always surprised at which posts get a lot of comments and which ones don’t — it’s never how I expect…) Looks like there’s not a good way (a stock listed on a major exchange) to play this trend. I love the idea of Shimano but I have to pass on a thinly traded pink sheet stock. Oh well.
Another side to the gas/energy crunch is wood stoves. I have been looking for a pure wood stove play for the past two weeks but have not found one. Everything I find is tied into other things that are home builder related.
There are other emerging players in the bike component arena: Sachs (german, I think) and Sram, though both are smaller than Shimano. Not sure how big Campy is relative to others.