Get out the bubble machine and queue up the tango music. It's hot IPO time.
Cabela's IPO is no laughing matter. After setting a range of $15 to $17 a share, demand drove that range to $18 to $20 a share. And, after the company sold its 7.8 million shares at $20, the stock immediately soared more than 40% -- the largest percentage gain on any stock exchange today.
The Wall Street excitement is not reflected on the company's website. There is no IPO news, and then there is this: "Our founders have kept Cabela's a family-owned company, and they still play a very active role in the organization." Well, it's time to call the Web manager in from the woods and get the 43-year-old company's history updated.
The self-styled "World's Foremost Outfitter" was a $1.4 billion business in 2003 and posted net income of $51.4 million. Over the last five years, it has posted annual mid-double-digit growth in sales and earnings. That's a lot of duck calls, but the growth is in line with competitors Dick's Sporting Goods
The "outdoor lifestyle" market (is that politically correct or what?) has estimated annual sales of more than $30 billion. That kind of money draws competitors like big-box retailer The Sports Authority
Cabela's has jumped today because it's a quality company that was priced cheaply on a price-to-earnings basis. That gap has been hooked and reeled in. What remains to be seen is if the company's long-term success can continue compounding at double-digit rates.
Fool contributor W.D. Crotty does not own any of the stocks mentioned.