Does Lynch + Gardner = ONON?

Note: I am an amateur investor currently stuck in the barn office on a rainy, rainy day. I’m a little chilled - think I have something of a head cold, haven’t had lunch and am bored and need something to fill up the seemingly vast amount of minutes before the lunch bell rings. All of which leads me to Peter Lynch and David Gardner (sp?).

Peter Lynch - one of the all time great investors, sort of like the late great Joe DiMaggio, once said that investors should invest in things they know. I like to think that when he said that he was standing in line at a little local place to get a donut and some coffee: Dunkin
Donuts. And thus a legend was born.

David Gardner. whose departure from the active side of the The Fool brought a tear to my very.eye (and I suspect a dent in the potential of my brokerage account) - was fond of saying that when analysts called a stock overvalued it made his heart go pitty pat. Now thats not an exact quote mind you - but its close enough for the few minutes I have before I get to a nice rib stew. A nice steaming bowl chock full of of ribs - with the meat falling off the bone, potatoes, carrots, onions and whatever else the cook finds to dump in there. Perfect for a somewhat chilly rainy, rainy day.

Anyway - back to Gardner and Lynch. Sometimes I wonder what we mere mortal amateur investors might have gotten had Gardner and Lynch ever partnered up to create what could have been an unbeatable team: Lynch - the rock steady and methodical head coach and Garner the “Let’s chunk it to the end zone” QB. Please note that the imaginary Gardner - Lynch team does not in any way belittle the Tom side of The Fool. After all, I read his book ‘Rule Makers’ and probably still have it somewhere on some dusty bookshelf. Was a fine book!

All of which leads me to a company called ONON. ONON is actually ON Holdings, which to be fair, you probably already new. But I didn’t. Why didn’t I? Well because its a European company and lately I have stuck to the American side of things. Well…that and because ONON doesn’t seem to fit the hyper growth, future of the world, shiny new SaaS thing thats just popped up model.

Note: I read once that the way to catch a monkey (Actually I think I may have seen it during a scene from the series called ZULU some time back that focused on the ZULUs (sp?) - was to find a long neck gourd, hollow it out and then put something shiny in the bottom. The theory was that the monkey would see the shiny thing - stick his hand into the gourd to get it and then hold on to it through thick and thin while you caught it. Note: I never tried this primarily due to the lack of a decent sized monkey population in my area and a lack of long neck gourds. However the whole scenario of it does remind me of the potential investing fallacies of lurching merrily along putting money into every ‘New Shiny’ thing that hits the market. So theres that. To illustrate please refer to the link below:

Now imagine that in place of Blucher-Blucher you substituted Upstart-Upstart or perhaps even Lucken-Lucken. See what I mean?

Anyway back to ONON:

On Holdings is not SaaS. It does not remotely resemble anything related to the future of IT, does not make companies run faster or better or profit more, and has nothing to do with EV cars or planetary exploration: it just sells athletic stuff and shoes. How boring and drab is that?

However, before we turn up our collective smarty pants high growth investing noses it might be worth a look-see at their financials. Lets check it out:

Most Recent Qtr Revenue Growth: +93.9%. Here is the Press Release and Transcript:

And the Rev Beat…almost perfection: 33%. Goodness Gracious Great Ball of Fiwa:

Note: I generally like to see Rev Beats at 4% or better as what I consider a really nice performing growth company.

And what therefore about Guidance? Projected 61% in NSG for the first QTR. Now isn’t that dandy?

So we have nothing more common than athletic shoes and athletic wear which seems to be taking a firm hold on European folks - ala Lynch. But what about the David Gardner (sp?) side of things? Well…here is where his philosophy shines through:

Overvalued!!! Possibly the Gardner (sp) secret sauce.

Now… someone, probably the family long time landscape supervisor, now retired, is ringing the lunch bell so one has to hurry to these things. So…I’ll leave it at this:

Is ONON a budding NIKE? ONON carried a valuation of 9B or so while NIKE sits at 185B. Lots more work to do here could be lots of happenstance propping up that 91% in this past quarters performance. But I really like what I think I might possibly see here despite it being in the wheelhouse of those snooty Europeans.

Now if my imaginary team of David and Peter were actually a thing - can you imagine the debate those two would have about this company?

Bottom Line: Subsequent to their latest report the company took off like a jack rabbit - has peaked - then fell back some. Typical pattern after a healthy ER.

Time for some nice Rib Stew.

All the Best,


I’ve been a runner for more than 60 years. I suggest that you google some independent reviews of ON shoes, e.g.: On Cloudmonster Review: Wow, We Finally Love an On Running Shoe - Believe in the Run. I don’t find much in the various reviews that would persuade me to invest in the stock.

I’ve seen a few of their shoes around, mostly on non-runners who (I guess) think they look cool. I think they look goofy, but de gustibus non est disputandum.


Hi MFungi:

Now thats a great comment and observation.

So the question then Becomes - what demographic is driving ONON sales to 91% Rev Gro over a single qtr? Those are SaaS type numbers from a company, if your observations run along similar users opinions, that makes shoes that serious shoe folks don’t like and think look goofy.

All the Best,

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Hoka was last years flavor of the month. They are owned by decker and I saw a lot of people running in them last year. They tried to get me to switch but I am partial to new balance and it’s hard to change out of something you like. Although the model I am in they changed 2 years ago so I went and bought enough pairs to keep me in them for 3 years. Dang companies keep upgrading what is already perfect.


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Hi Andy:

Always - for at least the last 5 yrs or so - been a UA guy. As an older guy I really don’t run all that much anymore, at least not that the average bye standing might recognize it. I sort of have a rolling shuffle sort of gait that looks more like a guy falling down a hill than not. Now don’t get me wrong, I can put on a decent enough burst of speed for about 20 yards or so -decent being in the eye of the beholder, but thats about it. Sigh!

Ok but - I am still trying to figure out whether this ON is just a sky high pop infield fly easy out - or - a deep over the warning track potentially out of here long ball. Whether ON is a flash in the pan rookie or a legitimate future Hall of Famer; while knowing full well that the answer is probably neither. But the pure fact of the matter is that an investor does not need them to be a Hall of Famer. Lets say their growth number is real and not the product of any fluke. And they manage to just double in value over a few years. Isn’t that good enough? (Although admittedly, good enough for what might be sort of relevant t the equation)

Now regardless of whether someone likes their stuff or not - enough folks evidently did like their stuff enough to juice the Rev Gro considerably. So why did they all of a sudden start putting up higher and higher Rev Gro numbers? Here are a couple of SA Scouting Reports:

Admittedly, stuff from SA is little more than opinions from guys who just decided to sign up for SA and post their thoughts. But here is an interesting quote from their latest conference call:

“In Foot Locker, for example, Q4 was by far our strongest sellout quarter in history. With the same numbers of doors as in Q3, unit sold increased by over 50% quarter-over-quarter, supported by the continued demand amongst younger consumers for products such as the Cloudnova.”

The two things that stand out for me are the incredible 50% increase in units sold tied together with the key phrase, “supported by continued demand amongst younger customers…”

As far as having a personal opinion I sort of take the same concept as the country singer who said, “If you don’t like my records just buy em and break em.”

Just saying.

All the Best,


I hear you Champ, My nephew says I don’t really run , and I told him then I trot, he said that isn’t really a trot, more like a forward fall. But hey it’s all about getting out there and pushing yourself.

The thing that gets me Champ is that UA had revenue for the last 9 months of 4.5 billion and Onon had revenue for the last year 1.5 billion (US dollars). Yet Onon only sells shoes right? and they are valued at 3 times the market cap of UA? I know UA has stumbled but they have higher earnings, Higher revenue, and more cash although more debt also than ONON. It seems that ONON is over it’s skii’s even if they are growing at 91 percent, which is impressive, but how much higher can they go with that valuation?



They list on their site that they sell men’s and women’s apparel including something listed as a Marinaro Beanie for $49 bucks. One things for sure - their stuff ain’t cheap.

How far can they go? That probably depends on if all the cool kids pile in leading all the middle aged wannabes to pile in leading to a smattering of grannies piling in. I put them more in the LULU category with its $45B+ market cap albeit with the ebbing tide of acknowledgement that that may be something of overhyped wishful thinking. Still - if the younger folks pile in, especially if those California folks make it the ‘In’ fashion style - then it might sweep the country. After that…they could skyrocket across China for a few weeks until the locals produce the knock-offs at cheaper prices.

What I think I have decided to do is too see if it drifts down into the $25 range and then take it on as a TB. Maybe - maybe not.

All the Best and Happy Easter to you and your Family,


Same to you Champico, best of luck in your investment.


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