HLYS (Heelys Inc)

HLYS came public at $21 but has yet to trade below 30. It hit its ultimate high the first day of trading at 38.75 or almost double the IPO price. The company's main product (shoes with wheels in the soles) is in high demand. I could not find shoes in David's size when looking for them for Christmas. Sales have been phenominal and the company is ramping up EPS now as they have reached critical mass.




After letting the initial trading wear off, I bot on the 21st taking a 5,000 share position. The stock took another 2 days to consolidate, but on the 27th it ran up again and so I added another 2,500 shares. I expect to see the stock continue to run quickly as they report good sales for the Christmas season and more fund managers decide they need to have this represented in their portfolios. I currently have a profitable 3% position.



Jan 12, 2007

Heelys has made a very nice run the last 2 days giving me a 15% return on my total purchase. I have no reason to believe the stock will stop moving forward, but because of the quick run and the fairly large position I started with, I am a bit uncomfortable holding all 7,500 shares. Therefore, I took 2,500 shares off the table realizing about $10,000 in profits. I will continue to monitor, and I have faith the rest of the position will provide further gains.

Jan 25, 2007

For those of you keeping score at home who saw HLYS today and may want to congratulate me on such a great trade... STOP THE PRESSES... I sold it - yes that's right - i missed it. Yesterday I was uncomfortable with the way the overall market was trading and while i was accumulating some decent gains in my account, i wanted to reduce exposure and so i trimmed back some positions. HLYS was one of them... HLYS was up over 6% today... I HATE HLYS!!!

Ok, all kidding aside, I'm disappointed but knowing only what i knew yesterday I would still make the same decision. The market is down sharply today. Many of my decisions yesterday saved me from pain today. HLYS is a volatile name right now and i need less volatility. While i wish i had the gains that i forfeited by selling, I'm not going to beat myself up too much for this one as not all trades are going to be correct, but on the balance if i use proper discipline, I will end up doing well.