Investors Increasingly Interested In Bicycle Industry
AMSTERDAM, the Netherlands – Listed companies in the bicycle industry worldwide enjoy a growing interest for fund ownership. Portfolio managers of investor’s funds have been moving into the shares of companies behind well-known bicycle and bike-component brands.
Reuters reports that fund ownership of Giant Manufacturing Co. Ltd leapt 10 percent last quarter of 2014. At Merida Industry Co Ltd fund ownership jumped 11 percent in the same quarter, while for Dorel Industries Inc it grew by 6 percent. Accell Group currently reports fund ownership at over 15 percent.
“This is one of those trends that we are hoping to catch early on,” said Jared Whatcott, of Wasatch International Opportunities Fund to Reuters. Whatcott owns shares of Giant Manufacturing and Merida in his fund.
Especially in the US this trend is alluring to fund managers because the demographics of cyclists in changing in this market. According to the country’s National Sporting Goods Association roughly a third of the riders have household incomes exceeding USD 100,000 (88,000 euro) a year. This is 63 percent higher than 10 years ago.
Cycling in exchange for golf
Industry experts say much of that jump can be attributed to the waning popularity of golf in the US, which still commands the highest portion of participants with household incomes above USD 100,000 among popular sports. Reports do indicate that the number of golf courses in US has been declining in the past years.
Investors are interested in stocks like Giant, Merida and Dorel as they watch the bicycle market expand and cyclists trading up to higher-end bikes that have higher margins.
As a result of this growing interest Giant has seen its shares jump 23 percent over the last six months, including a 7 percent gain since the start of January. Shares of Merida increased by 14 percent over the same time. Yet, Canada’s Dorel Industries has seen its shares fall 1 percent in the year to date, with a 13 percent jump over the last six months. In the final quarter of 2014 Accell Group saw its share value increase by 14.3%.