Originally Posted by wbroun
Anybody here invested in K2 stock (KTO on the NYSE), or have any thoughts about where it's headed? It's generally rated very favourably by analysts, and I like its American identity -- no offense, international types. I think it's a great company, from a financial perspective, but I don't know whether I want to speculate on them. I have to say, too, their stuff isn't really my style. Is ski stock too boring a subject?
While not offering any insights into K2 individually, the industry that K2 invests in (recreational sports) is going to be very dependent on the amount on expendable income consumers are spending. K2 is doing a good job of protecting itself against individual sport demand shortages by aggregating and diversifying their product lines. If skiing takes a hit, mountain biking may not. Additionally, they are outsourcing production to keep thier costs low. The weakening dollar may also help K2's european sales.
That said, as a company based on recreational spending, they are dealing with a flexible demand curve and are sensitive to market shifts. If you are interested in investing in K2, place it in the high risk section of your portfolio.