The Best Peak Oil Investments: Accell and Six Other Bicycle Stocks

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Tom Konrad CFA

This article gathers all the bicycle and e-bike stocks I’ve found in one place, and takes a look at a recent find: Accell Group (ACCEL.AS).

When I first became interested in alternative transportation as a peak-oil investing theme in late 2007, I was frustrated at my inability to find very many good alternative transportation stocks: The list of bike stocks I found was already very out-of date, and the lists of rail transit and bus companies I found did not distinguish between publicly traded companies I could invest in, and private companies I could not.

Almost three years later, I finally feel I’ve found enough publicly traded alternative transportation stocks that I feel I have a chance of finding a few good value stocks.  My alternative transportation stock list has expanded to 27 names, and is still growing with a new reader suggestion every couple of weeks.  Recently I published lists of nine mass transit stocks and three mass transit operators.  I also found four bicycle and moped stocks, only to find that list instantly out-dated because of three new reader suggestions and one bike manufacturer I found among the holdings of the Powershares Global Progressive Transport Portfolio (PTRP.)

List of Bike Stocks

In the interest of having a list of bike stocks all in one place, here are the ones I currently know about, along with where to find a more detailed discussion of the company’s business and fundamentals.

Dorel Industries, Inc (DII-B.TO, DIIBF.PK),
Giant Manufacturing (GTMUF.PK, TWSE:9921), and
Piaggio & C.S.p.A. (PIA.MI, PIAGF.PK) are discussed in my first article on bike and scooter stocks.

Advanced Battery Technologies (ABAT) features in my second list of electric and hybrid electric vehicle stocks.

Shimano (SHMDF.PK), sometimes called the “Intel of the bike industry” is discussed here.

I have yet to write about these bicycle makers:

Accell Group (ACCEL.AS) was suggested to me by Peter Cox of Greentech Opportunities, whom I met at the San Francisco MoneyShow.  I take a look at it below.

Merida Industry Co (9914.TW) is a bicycle company based in Taiwan.  I have been unable to find an English-language version of Merida Industries’ annual report or other filings.  If any readers know where to get them, or some other source that includes Merida’s full financial statements, let me know, and I’ll write about it in a future article.

Accell Group

Accell Group is a Europe-centric manufacturer of bicycles, bike parts, bike accessories, and fitness equipment.  Sales by CountryThe stock trades on the Amsterdam stock market with the symbol ACCEL.  The company owns a wide portfolio of national and international bicycle brands, and the company’s strategy is to buy and cultivate brands that are or can be leaders in their respective national or functional niches.  The company’s annual report lists 18 “main” brands with focuses on everything from bikes for kids (Loekie), to high-quality bikes and e-bikes in the Netherlands (Koga-Miyata), to bike parts suppliers like Junker and Brasseur.  If there is an underlying theme among the brands it is attention to research in innovation combined with sophisticated distribution and marketing. 

As I discussed in my first bike stock article, I’m most interested in bike stocks because I expect rising oil prices to stimulate the use of bikes first for short trips and errands, and then for commuting.Sales by Segment  This trend is already much more advanced in Europe than in the United States because of their more compact cities, higher gas taxes, and greater awareness of green issues.  This has helped Accell’s brands to stay in the forefront of e-Bike and commuter bike development, and possibly giving them a better understanding of what the future bike market will look like than rival North American manufacturers.  With a greater focus on volume production, Asian bike manufacturers such as Taiwanese Giant (and possibly Merida) with a greater focus on volume production rather than technical innovation and tailoring bikes to their customers needs are more likely to be followers than innovators in this regard. 

Accell might be better in a rapidly rising oil price environment where bicycle demand grows and changes rapidly, while the volume manufacturers are more likely to have the advantage in a more slowly evolving environment associated with a more gradual rise in the price of oil.  As I recently discussed, I think the more likely scenario is highly volatile and rising oil prices, giving a slight advantage to innovative companies like Merida and Shimano.

Liquidity and Valuation

The following table summarizes some of Accell’s important liquidity and valuation ratios:

Share Price 9/3/10 €32.80
Financial Stmt Date
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TTM Income Yield (PE) 10.3% (9.7)
TTM Free Cash Flow Yield 9.6%
Dividend Yield 4.8%
Net Debt/Equity 124%
Current Ratio 2.35

Accell’s liquidity is good, and the company is not highly leveraged.  The high 4.8% dividend yield should be considered in light of the fact that Accell has a policy of setting the annual dividend at around 40% of the previous year’s profits.  This allows the dividend to fluctuate over time, allowing a higher average dividend than would be likely in a company with the same level of profitability but a fixed dividend policy.  Despite the financial crisis, revenue and earnings have been growing steadily at least as far back as 2002, with 12% compound annual revenue growth and 22% compound annual earnings growth over that period.  The most recent 6 month earnings statement showed more subdued growth, with year-over-year revenue growth of 3% and year-over-year profit growth of 9%, but high growth is not necessary to justify Accell’s quite reasonable valuation.


Overall, Accell seems a good value play in an industry that should benefit from rising oil prices.  The only company included in the list of bicycle stocks above with a comparable valuation is Advanced Battery Technologies (ABAT).  ABAT has the advantage (at least for US based investors) of trading on NASDAQ, but is a Chinese company and only about 46% percent of its sales consist of e-bikes and batteries for e-bikes, while Accell gets almost all of its sales from bikes and bike parts.  If I had to buy only one of these seven at current prices, I’d buy Accell.  In fact, I currently have an open limit order to buy the company at only slightly below the current price. 

DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.


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