Under Armour

(Past Top Pick, May 10, 2018, Up 20%) Volumes are rising, the stock is coming alive and there's plenty of room for this stock to regroup. Those who have owned this since it's drop of the past few years will hold on now that it's starting to climb again, so they can get their money back. He still likes it.

He would be tempted to buy if it had a move above $16.77. They have stumbled and earnings are projecting a model price of $9.39 – about 37% over-valued. It may take a while for the fundamentals to improve. Stay tuned. It is very cheap, but he needs to see a move higher before he gets excited. (Analysts’ price target is $20 )

(A Top Pick April 27, 2017, Down 19%) Sold his shares last spring. They had a terrible 2017, including a bad data breach in their app, massive unsold invenstory and failure to meet international growth target. He bought it when it was down and out, and that was a mistake.

Makes great gear, but you need to separate a stock from a product, a company or a management. This is down 53% in one year. They beat on the last quarter, but took down gross margin in the full-year guidance.

Has a Short position on this because it has much weaker price momentum. More importantly, they really don’t have the type of valuation metric that Nike (NKE-N) has. The balance sheet is fine and they beat on a recent quarter, but ROE’s are low and they really aren’t cash flowing.

Not a category he would go into. Retail is getting beaten up pretty badly. He likes their products. There is so much you have to get through to make this a successful investment.

He would not be an investor at this time. The technology they put into their gear is fantastic. This is an example of a stock that he really likes, but wouldn’t touch. You are going to face a raft of sellers who will be looking to get their money back when a stock starts moving up. Also, a lot of sales are still coming through brick-and-mortar storefronts, which are facing a challenge.

North America is where they have seen their weaker growth. International results were stronger. This and Nike (NKE-N) are really in a league of their own when it comes to apparel manufacturers. They command such a multiple premium on their valuation side. We have had such a strong trend in at-leisure with a lot of new entrants coming online and a lot of knock off brands. She wonders if the extra capacity is there and we get a reversal in consumer product preferences.

The stock was down 25% post its earnings but he does not think the valuation is attractive enough. Apparel cannot grow forever. Retail is under a lot of pressure. UA-N is trying to grow internationally and that is good. Wait a little while longer to get it at a better price. (Analysts’ target $21.)

This is going to have to break through some of its resistance levels to begin to even look like something you want to look at. It consolidated at around $25, and everybody that bought in that range is going to want to get out, so you are going to run into a wall of sellers. There are much greener pastures. It is also into a tough retail environment.

It is like a number of faddish US stocks. It is overvalued, but loved. He would not endorse it. He thinks Trump could do all kinds of damage. This is off his buy list.

Seasonality is October 28 until Black Friday. They also do well from Jan 23 to April. People are interested in retail stocks when something is about to happen. It has dropped back to lows of earlier this year. Give it a bit of lee way and see if it begins to pick up. He has not entered the retail sector because he has not yet seen the strength for this year. XRT-N, the ETF has started to go up but this one has not, so that is not a good sign.

Terrific CEO. They married apparel with technology. All big companies look expensive at the beginning of their story. This could be a double or triple.

Nike (NKE-N) or Under Armour (UA-N)? If you are older than 25, you are probably still a Nike person. If you are under 25, you are probably with this one. In terms of going forward, you are probably going to go with this because it looks like they are going to have a better growth rate. Valuations on both are high, so he wouldn’t rush out to buy. Valuations on both are far too extended right now.

A higher growth story, but the whole group is at a valuation premium. Although the company is doing well today, if the growth model and valuations don’t come through, you are paying a lot today for what the company looks like a few years from now. That always makes her nervous in protecting capital.