When to Sell Heelys HLYS

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We all know it’s a fad. But here is the one million dollar question: when shall we take profit (or loss) for the Heelys stocks (HLYS)? From the IBD article today, it seems Heelys still got room to grow. The following is quoted from IBD:

“For one thing, there’s still plenty of room to grow sales in parts of the country between the coasts, he says. And overseas sales offer lots of potential, especially in Europe.

In European Union nations, 40 million kids are between 6 and 14, Heelys’ target market. That’s slightly more than in the U.S., where roughly 36 million kids fit into that demographic…

Samuels believes demand for Heelys in the U.S. will stay brisk for at least the next 6 to 12 months. “You can see penetration increasing pretty quickly,” he said. The big question, he says, is what happens after that…

Heelys has about 800 retail customer accounts. Some of its top customers include Journeys, Foot Locker, Champs and The Sports Authority, where it’s in all 400 stores. Some chains don’t carry Heelys in all stores, so there’s more room for growth.

To keep kids coming back for more, Heelys keeps adding new styles and periodically makes technical improvements. Since their debut six years ago, the shoes have become lighter, faster, more comfortable and easier to use…

Analysts polled by First Call estimate that fourth-quarter earnings will come in at 28 cents a share vs. 6 cents last year. For the full year, they expect earnings of 95 cents, a 32% jump over 2005. For 2007, earnings growth is pegged at a more moderate rate of 18%.”

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