Adidas (ADDYY)

(A Top Pick July 10/14. Down 5.42%.) Had a bit of a rough time, mostly with their TaylorMade, and have to figure out what to do with that business. He wouldn’t be surprised to see them sell it. Their shoe business is doing well. Their running shoes in China are doing particularly well. Lost a little bit of market share to Nike. but have gained that back again.

(A Top Pick May 6/14. Down 22.41%.) He should have seen the writing on the wall when Nike outfitted the World Cup players more than this one did. He was also interested in Europe as a turnaround story. They need to get their act together.

(A Top Pick April 9/14. Down 19.62%.) Valuations had looked decent, which is why he had gotten into the name. He liked the consumer side of things. Had to sell his holdings in October because of a profit warning because of Russia, as well as they were going to retail their golf division.

(A Top Pick April 9/14. Down 24.64%.) Sold his holdings in October. Last fall, they issued a material profit warning based on what was happening in Russia and restructuring with regards to his tailor-made golf line. To him this was a bit of a management situation in terms of their guidance.

They have the World Cup locked up because they are a sponsor for both Argentina and Germany. This has been down this last year, partly because of TailorMade, which has been weak. Also, had some difficulties in the US market. Nike has been gaining share. Thinks Adidas is in the cusp of turning around. TailorMade is bottoming out, and year-over-year numbers should start looking better. Reebok is another problem for them. They are focusing Reebok on CrossFit, and are getting really good traction on that. Sales from World Cup should boost revenues. Yield of 2.09%.

Off about 20% this year. Reported in Europe early this morning. Earnings were a little disappointing, but the stock actually did well in the market today. Too many people have been citing World Cup as a reason to own, but company feels this will hit up in the 2^nd quarter in earnings. They only have 5%-6% of the running shoe market in the US where Nike has a stranglehold. Need to tackle that and will probably have success. If they don’t start to do better, there are some activist investors in Europe that will start to make some noise.

Mr. Wong referred to the symbol AADDYY-O. A new position. Will do quite well with the economic recovery in Europe and the FIFA world cup. They will get a lot of press and a lot of purchases. Are under pressure in share price due to exposure to emerging markets, but he thinks emerging markets will be a big beneficiary for this one. 15% earnings growth expected.