Your Adarsh™

Letz mint some ‘ka-ching’

*Rolling kids and Abounding brokerage accounts – HEELYS !!!!!!

Want to gift something that your kid would cherish?

I got three answers

1) Heelys

2) Heelys

3) Heelys.

Mark my words, your kid is gonna love you like never before !!!!!!

Show this photograph to any teenager and ask what he/she sees.

The reply would be a shrieking “HEELYS!!!!!”. Don’t even expect him/her to pay attention to the hot gal and her sexy legs.

NOTE: Teach your kid how to ride them, before you leave them on their own. Don’t let him get bruised!!!

The latest craze among the age group of kids to adolescents has come public last December and has been rocking the market since then. Rolling Heelys to the hot IPO market earned the investors gazillions, jumping a massive 62% on the debut!!!!!!!. Closing price on the first day of an IPO was 32.60 after it came public at a raised price of $21 from the expected $17-$19. In minting money for the investors in 2006, Heelys stands third after Chipotle Mexican Grill (CMG) and MasterCard Incorporated (MA) in the year 2006.

Positive analyst action rode it up a few bucks to $38-$39 levels and that drew a huge short interest thrashing it down to $28 even after a blockbuster earnings report from the company. The Net income for fourth quarter Dec. 31, 2006 increased 700 percent to $11.5 million from $1.4 million a year ago. Earnings per share increased to 44 cents per share from 6 cents per share in the prior year period.

The big drawback came from the earnings report where the company did not care to provide any future guidance, which the market values heavily and decides on what price the stock should trade at. But realising the mistake, the company took part in the Bank of America consumer conference in NY and took a questionnaire and responded better than at the earnings report.

I want to make some points here:

1. First and foremost, the earnings blown out..not even a single analyst fore casted the earnings Heelys made.
2. Exceeded analysts consensus forecast of $0.28 per share by a HUGE margin.
3. People thought it is a speculative play… but considering the rate at which the earnings are growing…. I got some serious question to the bears and shorts!!!!
4. They are growing at over 300%. (The most pessimistic assessment would be a 100% which itself is a huge run)
5. Considering a $1.44 ( minimum ) earnings again, at a 30 multiple (very minimal for a stock with such banging growth) should at least have us at $43.2 !!!!!!!!!!!
6. Even if you are very pessimistic and consider having just a small growth and expect it to make a $1.6 per share and a 30 multiple will put you at VERY VERY conservative $48 ‘right now’.
7. I accept that may be Mike Staffaroni should have given us much better insight into the future considering the investors like us. I think that was the only mistake and I love what I heard at the BOA conference.
8. Do not forget the number of patents we have under our belt !!! Am I correct if I say 48.

9. Around $30 and EPS of 1.44 a P/E multiple of around 20 looks like getting Heelys shoes on bumper sale for Thanksgiving….LOL

10. Last but not the least they are not fad and they are also expanding their collection.
I would like to see a couple of more analysts starting off with a buy or overweight untill we get to a 40 multiple.
Guys hold on ….Load the truck (in crammer’s words). Get ready to go on a world trip once you press the cash register, not before an year from now. I am going against Crammer on this stock (though I respect his show).

I reiterate I’m not going to sell my bunch atleast untill they miss one quarter’s earnings by more than a dime.

See what other’s think about this stock?



Please leave your comments and sentiment.


March 22, 2007 - Posted by | Blogroll, Future Buys, Holding, Long Term, Profited


  1. Im sorry, but Heelys shoes ARE a fad that will be dead in 1-2 years. You do realize that kids are highly irrational. One day they may praise Heelys but the next day after hearing about something better to spend their money on, they will forget Heelys even existed. Do you remember SOAP shoes? The shoes with the grinding plates? The company made tons of money, but the shoes were a fad. Only shoe companies with reputation last, i.e. Nike, Adidas, New balance, etc., not some shoe with a wheel on it. What is Heelys going to do after no one wants their roller skate shoes? Are they going to sell clothes? I’m sorry but I don’t think you understand that Heelys has only one idea, that is to sell their rollerskate shoes. They have no other good ideas on their drawing board. I wouldn’t touch their stock with a ten foot poll and you shouldn’t either.

    Comment by Vincent Din | March 29, 2007 | Reply

  2. Hi. I got my heelys for Christmas from my g-ma and so far they are really fun!!!! The colors are black and pink. I just wanted to say thank you to the person mwho invented them!!!!!!!!!!!!! P.S My heelys only come with one wheel in each shoe. THANKS!!!!!!

    Comment by Aly | March 9, 2008 | Reply

  3. i got heelys for chirtmas to but thers a but 2×2 wheels

    Comment by sam | January 1, 2009 | Reply

  4. that means to wheels there new

    Comment by sam | January 1, 2009 | Reply

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