[ad_1]
Bikes have been around for over 200 years now and were far from a high growth industry until 2020. But then COVID-19 arrived.
Bicycle sales have exploded during the pandemic. According to data from the National Bike Dealers Association, bicycle sales increased by almost 30% in 2020. A permanent shift in the behavior of global consumers means that this trend could continue in the years to come.
According to some forecasts, bicycle sales could increase by an average of 7% per year until the end of the 2020s, spurred by an increased interest in exercise and well-being, more time spent outdoors and bike sharing technology. Stocks that play a role in this suddenly growing industry could present an investment opportunity.
Invest in bicycle stocks
Bicycle manufacturing stocks – which are part of the industrial sector of the economy – are difficult to invest directly. Many bicycle companies are subsidiaries of large manufacturing conglomerates, transport parts suppliers, vehicle manufacturers, etc. But a few more bike-oriented stocks could present an opportunity to bet on the industry’s growth potential in the years to come.
|
Society |
Market capitalization |
The description |
|---|---|---|
|
Interactive Platoon (NASDAQ: PTON) |
$ 30 billion |
Best Home Workout Company and Stationary Bike Manufacturer. |
|
Shimano (OTC: SMNNY) |
$ 27 billion |
A Japanese manufacturer that manufactures bicycle components. |
|
Vista Exterior (NYSE: VSTO) |
$ 2.3 billion |
A manufacturer of various outdoor equipment including bicycle accessories. |
|
Accell Group (OTC: ACGPF) |
$ 1.3 billion |
A Dutch conglomerate that owns several popular bicycle brands around the world. |
Data source: YCharts. Market capitalization as of September 1, 2021.
Image source: Getty Images.
1. Interactive Platoon
There was arguably no greater beneficiary of recent fitness and gym activities than Peloton. The high-end home workout equipment company has attracted millions of users in 2020. While its momentum has slowed down lately, it’s clear it’s far more than a one-time winner in the event of pandemic.
Of course, Peloton is not a traditional bicycle company. Its popular product Bike + is stationary, leveraging a large tablet and engaging content to keep users riding like crazy. Nevertheless, a bicycle is a bicycle. Millions more people could purchase a Peloton cycle product in the years to come as home workouts seem to be here to stay. Just keep in mind that Peloton’s slowdown from triple-digit percentage revenue growth in 2020 can create incredibly volatile action on stock prices.
2. Shimano
Japanese manufacturing conglomerate Shimano is a leading name in outdoor gear. Its bicycle components are a regular feature on all kinds of bicycle models, from affordable road bikes to high-end road bikes. From brakes to cranksets, Shimano is a leading supplier of parts to the bicycle industry.
Historically a slow and stable industrial company, Shimano’s sales have accelerated over the past year and shares have been climbing higher. Don’t expect high double-digit returns forever, but if you’re looking for a way to bet on renewed interest in bicycles, e-bikes (e-bikes) and related outdoor gear, this manufacturer should be among the best ways to profit over time.
3. Exterior view
If you are an outdoor enthusiast, chances are you have some accessories made by Vista Outdoor. The company’s subsidiaries include CamelBak, Bushnell, Camp Chef and Remington. In addition to accessories, Vista Outdoor also has the QuietKat e-bike brand, a popular choice for those looking for a greener ride and more efficient ride.
Like Shimano, Vista Outdoor has historically been a slow and steady business. In fact, sales had actually struggled to gain traction in the years leading up to the COVID-19 pandemic. But the demand for outdoor gear and bicycles since 2020 has quickly turned the fortunes of this small business upside down. If interest in cycling remains strong, it could be a boon for Vista Outdoor and its shareholders.
4. Accell Group
It is a small Dutch multinational organization, but it has several subsidiaries specializing in the manufacture of bicycles. It is also the largest European electric bicycle company. Brands include Haibike, Ghost, Raleigh, and Sparta, as well as parts maker XLC.
While sales of traditional bikes fell in the Accell Group lineup last year, e-bikes stood out and helped increase profitability. As trends such as short distance commuting, bike sharing platforms and a conscious effort to make transport greener gain momentum in Europe and other markets, Accell Group could be a long-term winner.
Is bicycle inventory a good investment?
Whether it’s a way to enjoy the outdoors, a sporting event, or a short-haul commute solution, bicycles hold a prominent place in the transportation industry. The pandemic has turned this sleepy mode of human movement into a possible growth theme in the years to come.
Just keep in mind that the sales boom at the start of the pandemic is unlikely to continue. This slowdown could lead to some volatility in bicycle stocks. Nonetheless, a forecast of average annual growth in high single-digit percentages over the next decade is not to be faulted. Investing in bicycles could be a lucrative theme to go along with.
[ad_2]
