This Round's Pick: HLYS
As you know, in keeping with the LBTBTM strategy, roughly every two weeks I pick up another stock, with the intention of holding for approximately a year. This time around, it's Heely's, Inc., which makes those shoes for kids with the wheels in the heels.
In addition to some impressive financials, I like how clearly they've defined their target market:
Heelys, Inc. engages in the design, marketing, and distribution of action sports-inspired products for 14 year-old boys and girls.
Their market cap is about $600M, and the MFI screener calculates their pre-tax earnings yield at 10%, and their pre-tax return on capital at over 100%.
My current holdings are posted here, You can also track my holdings through Covestor.
This week I also sold my holdings in Renaissance Learning Inc., up 18% in just over a year.
P.S. -- Don't forget the fine print.
posted by Andrew Savikas @ 9:26 PM
1 Comments
1 Comments:
Ouch. I think HLYS are dead. I actually got a small piece of the IPO at 21 as part of the friends and family.
It jumped up to the 37-38 range. I was real excited with earnings. Management was hinting strongly that there would be new products. They didn't announce anything new during their earnings reports so even though they blew their projections out of the water. It dropped to the 31 range.
It slowly edged up to 34 over the next couple of months. No announcement on new products, I got nervous. It kept rising as we got to the day they were going to announce earnings. I sold at just over 37.
THey announce earnings. THey blow projections out of the water again. BUT management announces a secondary offering composed of insider shares. Everyone thinks that ppl are jumping ship so down the shares go into the mid 30s. Then 20s. Today at one point they dropped below 10. I think it's at 12 now. I have no confidence in this management team. Their only hope is for a bigger shoe company to scoop them up.
They're a fad. A one trick pony. I made a nice wad off of them, but they haven't shown they can go to the next level. You might get lucky if someone buys them out.
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