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Non-Tech : Cannondale Corp. (BIKE)
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To: Mel Spivak who wrote (21)9/6/1997 10:43:00 PM
From: Fredric D. Bellamy   of 103
 
This week Cannondale's board authorized the company to buy back up to 1 million shares on the open market. Undoubtedly the company had been frustrated at the stock price's seeming inability to move higher, notwithstanding continued good earnings and sales reports, as well as positive developments relating to the successes of the company-sponsored team in European races (including legs of the Tour de France).

I don't know if Wall Street has been skeptical because of reportedly shrinking U.S. sales of adult mountain bikes (according to announcements of lower-than-expected earnings by GT Bicycles), but -- as you must have noticed -- the stock has been languishing over the last few months. Yet even assuming some shrinkage (or slowing growth) in the U.S. market, BIKE's overall sales (as far as I can tell) have continued upward.

Of course, there is also the shifting sentiment in the market toward small cap companies, in the latest apparent sector rotation. The Russell 2000 has been hitting new record highs (while the large cap Dow stocks seem to be languishing a bit on average) during the last few weeks. In light of this development, perhaps more investors have been looking for smaller companies that appear to be undervalued based on their rates of earnings growth. I would imagine that many a screen intended to find such stocks would turn up BIKE.

The subscription-based investors' web site, The Street.com, has done a couple of nice articles on Cannondale. The articles basically portray Cannondale as a growth company with a good (but perhaps somewhat overlooked) story.
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