 |
 Execute:
A Very Cool Trade in Action Sports. |
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  No
sense mincing words: we suggest that investors initiate accumulation of
Execute Sports (OTCBB:
EXCS), a unique action/performance sports equipment and apparel
company at current trade levels: around 50 cents a share.
The reason is simple: while exhibiting
great potential as a standalone company, we also feel strongly that Execute
shareholders could ultimately experience the same impressive growth as
larger peers in the sector, such as Quicksilver (NYSE:
ZQK) (among others), which has grown into a $1.7 billion market
cap powerhouse.
Here’s the deal: If you had
purchased some ZQK shares under $1 a few years ago, those multiple split-adjusted
shares embarked on a steady rise and hit $18-plus in mid-2005.
In our opinion, Execute looks
a very similar opportunity—with faster growth potential --and should be
accumulated at current levels.
 Founded
in 2002, Execute has been public for a very short time so there is little
history from which to build a cogent technical picture. While we feel that
the potential is significant for price share gains, it would be remiss
of us not to suggest that since the major volumes occurred around 35 cents,
a stop loss at that level makes sense.
SmallCap readers are among the
first to hear of this unique opportunity. We feel that Execute’s business
plan and growth potential will serve to deliver great returns to patient
investors who understand the profit power of branding and the explosive
growth potential of the sports and leisure markets.
Salient Points:
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Market Cap around $10 million.
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Revenues (ttm) $2 million.
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Academy Snowboards already in top ten
for the industry.
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Solid plan underway to drive apparel
and equipment sales globally by increasing brands recognition through domination
of Professional competitions.
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Already sponsors several winning world-class
action sports teams to drive brand that recognition.
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Best overall rider title for Academy
boarder Chad Otterstrom.
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Academy Snowboard team continually wracking
up major awards, including winning prestigious Transworld Magazine team
challenge two years running.
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Exclusive worldwide license to design
and manufacture apparel through 35 EagleRider franchises and online at
www.eagleridergear.com
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Mix of water/snow products ensures yearlong
selling season.
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Develops select OEM and licensing programs
 Executes’
performance sports and apparel products—including Academy Snowboards, Execute
Wetsuits and Kampus Wakeskates and Boards –are experiencing growing appeal
to a large number of action sports enthusiasts currently numbering in the
ten’s of millions. That group makes up a portion of the more than 100 million
folks within the Gen X and Y demographic, which has control over more than
$170 billion in disposable income. Anyone familiar with this massive, image-seeking
consumer phenomenon knows that they aren’t afraid to spend it.
Shredding the Competition…
Check out the success in Japan (release
below) as Execute increased its sales penetration of Academy Snowboards
by more than 100 percent. We believe there will be many more of these types
of announcements to come, as the brands grow worldwide.
The action sports equipment market,
while large and growing, should be classed as a niche market. What isn’t
niche is the attendant apparel market. There’s a reason why Nike pays Tiger
Woods and others million of dollars. It’s geared to drive Nike’s apparel
sales.
For example, fully eighteen percent
of Quicksilver’s 2005 revenues of $1.8 billion came from t-shirt sales
alone. T-shirts. Do the math. These are massive markets for Execute.
 We
believe that a growing number of action sports enthusiasts will spend ever
larger amounts of their cash on this type of unique apparel, particularly
Executes’, both for the quality and cool factor. As anyone who has invested
in this sector before knows, cool comes at a high price—and with very high
profit margins.
The current market for water and
snow sports action equipment and apparel exceeds $5 billion. Look for that
number to grow nicely over the next decade with Execute riding along with
it through increased market share.
The company has carefully crafted
its product mix to ensure that it ships and sells all year long, unlike
a lot of competitors who have too narrow and seasonal a product focus.
The future winners in this space
will be those who innovate and execute (pun intended) to deliver the brand
and products that will excite its large and affluent demographic. Execute
is keenly focused on profiting from these growing markets.
 The
identification with a sports star, whether Tiger or Academy Snowboard Transworld
Pro Rider of the Year, Chad Otterstrom, means that all levels of fans of
these sports want the gear; for themselves, their kids, their friends.
Look at NASCAR…Win on Sunday, Buy on Monday.
NASCAR is an interesting example
of purely driving the brand into apparel sales. You can buy a wetsuit,
snowboard or wakeboard and the apparel. You can’t buy a NASCAR; you can
only ‘participate’ through the apparel.
Execute Sports has the moves and
management to carve out a significant portion of both the action sports
equipment market and drive the brand into significant and potentially exponential
apparel sales growth over the next few years. The brands are gaining traction
and apparel sales will likely dwarf equipment sales—which will still remain
substantial—as the company progresses.
We believe that that revenue growth,
both organic and through acquisition, will increase the companies size
quickly to the benefit of shareholders. There’s a lot more and we’ll cover
it all over the next few months.
Show your kids how cool you are.
Accumulate some EXCS before they buy the gear and the apparel. Believe
me, they’ll be buying it all soon enough, as the brands grow profoundly
within that demographic.
| Press Release
Academy Snowboards Increases Market
Presence in Japan for 2006-2007 with Triple Digit Growth in Snowboard Sales
SAN DIEGO, March 24,
2006 (PRIMEZONE) -- Execute Sports, Inc. (OTC
BB:EXCS.OB - News) announced today that Academy Snowboards has increased
its sales penetration into Japan this season by more than 100%, with an
initial order of 800 boards through First MMT Co. Ltd., a leading Japanese
Snow and Surf distributor which exclusively distributes the Academy Snowboard
brand.
Academy Snowboard’s
marketing director, Jeff Baughn commented that “we are extremely pleased
to see the Academy Snowboard brand continue to gain traction in Japan,
where snowboarding in general has such a strong and growing base of snowboarders.”
There are an estimated 4.5 million snowboarders in Japan, representing
annual sales in hard goods alone of close to $1 billion.
First MMT’s brand manager
Toru Kagaya added “Academy Snowboards continued commitment to producing
the highest quality boards, supported by an award winning pro team including
Transworld Rider of the Year’s Chad Otterstrom and Mike Casanova enables
us to continue to drive sales into the burgeoning Japanese market.” The
Academy Snowboard line has won industry top ten honors on the Rhythm 157,
Commuter 156 and the Merit 157.
Baughn stated further
that “we are getting great feedback in the Japanese market on our partnership
with Jason Lee’s “Stereo” brand on the Rhythm boards.” Academy Snowboards
teamed up with Jason Lee (a former pro skateboarder and current star of
television’s My Name is Earl and his Stereo Skateboards) to add the Stereo
graphic onto the Rhythm line of boards. Toru Kagaya commented on the partnership,
“the most popular brand in our market for 2006-2007 is Rhythm. Everybody
is really stoked on the graphic, especially people who know about skateboarding,
because Academy Snowboards is using the Jason Lee graphic and collaborating
with Stereo. Fusing the skateboard brand with Academy Snowboards is one
of the most forward-thinking marketing strategies that we have seen, and
it is paying off.”
Academy Snowboard’s
pro team competed earlier this month in the Toshiba Slopestyle Invitational
in Japan, where Mike Casanova won “Best Rail Jam Trick” honors. The team
competes in April at the Transworld Team Challenge. Academy Snowboards
team has won the challenge each of the past two years. Entrants to the
event include Burton, Ride, Forum, K2, CAPiTA and Rome.
About Execute Sports,
Inc.
Based in San Clemente,
California, Execute Sports, Inc. develops performance products including
wetsuits, vests, rash guards, snowboards, wake skates, bindings, bags and
apparel for the action sports industry. The Company's brands include Execute
Wetsuits, Academy Snowboards, Kampus Wakeskates and Kampus Shoes, Execute
Moto Graphics, Collective Development Bindings and Collective Development
Bags. In addition, Execute has an exclusive worldwide license to design,
produce and distribute EagleRider apparel through EagleRider's 35 franchises
and through the Company's eCommerce site, http://www.eagleridergear.com.
For more information, go to http://www.executesports.com
and http://www.academysnowboards.com.
About First MMT Co.
LTD.
Based in Tokyo, Japan,
First MMT is a leading action sports distributor of brands including Academy
Snowboards, Mission 6, Ashram, 51 Lid, Otis, Ransom, Sticky Bumps,
S.A. Force and Surf Laboratory.
Contacts:
Execute Sports
Investor Relations
Todd M. Pitcher
John Bevilacqua
858-518-1387
877-891-7018
Todd.pitcher@executesports.com
jb@sundargroup.com |
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Got comments, questions or suggestions?
Send 'em on over: Editor@smallcapdigest.net
If you wish to send a written request
or inquiry, please send it to our physical address:
TGR Group, LLC
4653 Carmel Mtn Rd Suite 308 #402
San Diego, CA 92130 |
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| Russell
Still Rocks. |
| The
intelligentsia can try their best to talk down smallcaps, but the chart
just keeps climbing. Selected areas in all sectors are doing well, regardless
of size, but smallcaps seem to be coming out the gate the strongest. Why?
That's where the growth is.
We
suspect the Russell 2000 has enough legs to take out the 800 level in the
coming months. It appears to be gunning for the Expanded Objective Point
of 805 (see
chart here). Track it closely as we should get some decent short-term
pullbacks to provide excellent entries. The broader markets are yielding
to higher volatility, so be nimble on what should be some pretty streaky
days ahead. In both directions. |
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| Novelos
tackles Hepatitis C. |
| Novelos’
second Compound NOV-205 is planned for a Phase 1b trial by mid-2006. In
Russian studies, where the compound is approved, clinical studies in hepatitis
B and C patients greatly reduced or eliminated hepatitis viral levels and
significantly improved abnormal liver enzyme values. This arrow is yet
another in the growing biotech arsenal of NVLT as it moves its compounds
toward commercialization. The Phase 3 study for NOV-002 should begin in
2006, hopefully under a Special Protocol Assessment (SPA). This contract
between the Company and the FDA is virtually a straight line to approval
if all the conditions are met. At $1.85, the shares appear extremely ripe
for accumulation as these, and further, initiatives progress. |
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| Loosing
Lucent |
| Looks
like French firm Alcatel is talking merger with trading volume leader Lucent.
Boosted the telecom sector, but for those looking for a punch in the price,
today’s pop above $3 was likely all you’ll get. It’s a merger of equals;
no premium to market is forthcoming, unless some other behemoth wades in,
which is doubtful. We’ve played with Lucent a few times, made a bit of
money, but now looks like it will get swallowed by another. Probably the
right thing as maybe now it will be able to get out of it’s own way and
become accretive to Alcatel. Like losing an old, albeit cheap, friend. |
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