Shifting to a Higher Gear with Accell

The COVID pandemic changed many things over the past year. One was that people went outdoors to beat cabin fever or to get a little exercise. An activity that provides both is bicycling, which has become cool again. If you have tried to buy a bike during the past year, you probably were out of luck or on a long list. Most bike shops were quickly sold out of their 2020 inventory – and seem likely to do so again in 2021.

Concurrently, the phenomenon of e-bikes has removed a major excuse to climb aboard. E-bikes, which use battery power to supplement a rider’s own exertion, are particularly appealing to those who don’t relish battling gravity when climbing hills – or who seek a little boost to keep up with friends. This has created a whole new market for the bike industry. Though they are not as common in the U.S. as in Europe, we noticed e-bikes too and recently made an investment in Accell. The company is a Dutch-based manufacturer of bikes and bike parts, and it is Europe’s leader in manufacturing e-bikes. Even when sales of traditional bikes go downhill, sales of e-bikes and (highly profitable) parts are expected to continue powering ahead.

While the benefits of offering a climate-friendly alternative to fossil-fuel-based transport certainly get our wheels turning, the company’s bright spots extend beyond its environmentally friendly products. Accell is focused on cutting the environmental impact of its operations by reducing its energy consumption, transitioning to 100% renewable energy, and eliminating single-use plastics. It also aims to diversify its workforce and is progressing toward its goal of having women comprise 40% of senior management.

The booming business in 2020 sharply improved Accell’s financial condition, and the stock has shot ahead like a biker at the start of the Tour de France. The company’s stock is traded on the Amsterdam exchange (but is priced in dollars on client statements under the stock symbol ACGPF). We normally invest in foreign companies through American Depository Receipts (ADRs) in U.S. markets, but we did not want to let this one pedal (or hum) by.

After such a fast ride in the stock since we bought it last December (up nearly 50%), it might need a rest. Yet, we expect to continue to be happy to be along for the ride.