LuLulemon Athletica (US) (LULU-Q)

 It reports Thursday. Many short-sellers are betting they won't sell enough because of their high prices, but this is a remarkable company.

Shares soared 16% today after reporting. China was a key driver. Inventories and loyalty program are doing well. An excellent quarter. They bought back a lot of shares.

Tries to stay away from specialty retailers, though LULU might be an exception. Seems to have bottomed out and is coming back. Tough business. He'd rather own an AMZN.

Started the year at $520, then lost 50% of its value. Starting a recovery, but losing steam. A possibility, but be very careful. Not a lot of volume on the buying, certainly not as much as on the downside. Don't take a big position, $300 would be a good place to get out.

It is a large company with good products but some styles that are coming back are not their strength. Revenue is slowing down which is not good for any stock trading in the 50X, 40X or 30X range. Revenue guidance dropped in the last quarterly report. He prefers smaller size retailers.

Loves that their CEO just bought $1 million in shares. They will likely tighten their product offering, which is good. Shares are down 38% this year, bottoming last month. LULU offers the best product in their class, better than Nike or Under Armor.

Problem is so much competition in apparel. Nike has similar problems. Would avoid all apparel.

Consumers are fickle and tastes constantly change. Avoids this sector.

He's not a big fan of retail, though this one's the best of its kind. Inventory issues. Good brand and company, great products, executes well. Relatively cheap at these levels. Not a value trap. Has a specific audience, return customers. 

He's definitely looking at it, exciting at these levels. Hiccup with Breezethrough over last couple of weeks, what will inventory write-downs be? EM penetration requires lower margins. Doesn't report until September. Worth doing your homework. Hoping they can right the ship and get back to growth.