Now that SKX has gone from $73.5 to $104.6 (up 42.3%) in 5 short weeks, does anyone remember when I kept posting “Why would anyone invest in UA when they could invest in SKX with MUCH faster growth and a MUCH smaller PE?” I mentioned that I thought UA was trading at such an inflated price on glamor, while SKX sold comfort, which wan’t as sexy.
During the same 5 weeks UA fell from $85 (actually they hit $88) to $78.5.
I hope some people on the board profited from my questioning.
Saul
Saul,
Yes, I did. Thanks
Andy
So did I. AND I bought my first pair of Skechers. Thanks, Saul!
Hi Saul, I did. Many thanks. Sold 3/4s of my UA (which has been extraordinarily good to me over the past 6 years and was among my largest positions) and purchased SKX with some of the proceeds. But my decision was also motivated by the fact that I love my Skechers shoes; in both cases, I committed because I know, use and love the products. But yes, UA valuation doesn’t offer lots of room for explosive growth like SKX…
Thanks Saul. As I have promised myself since the Westport board dust-up, if you have an opinion I’d be an idiot not to at least give it careful consideration.
Quadrupled my position in SKX and looked more carefully at a pretty comfortable pair of trendy dress shoes which I thought were Cole Haan’s with the Nike developed LunarGrand sole- nope, they were SKX shoes. Wow SKX took down Cole Haan and Nike in one shoe. Only regrets are that I didn’t buy more SKX and another pair of the shoes at Nordstroms Rack where I found the first pair on sale.
David
Ditto from me regarding selling UA and purchasing the “Top Four”.
Very profitable move indeed. Thank you, Saul.
My staff made me aware of when almost everyone of them began wearing these very colorful shoes and bragging how comfortable they are. Then my wife, who is my receptionist, begin buying them. And buying them. Women and their shoes! I had to see what the excitement was all about and now own 2 pair. Very comfortable indeed…especially a pair called “Shape-Ups”. Remarkable really.
UA was a great investment that had more than doubled, but it is very obvious that SKX will out run them over the next few years due to a much more attractive evaluation.
Jim
As far as UA vs. SKX goes, yes at this time I agree that due to valuation SKX looks far more attractive. I would say that UA has much stronger mindshare and brand, especially among the youth. Also that UA is very diversified in terms of product line - shoes is relatively new to UA.
SKX on the other hand is making great attractive, comfortable, and affordable products. They are definitely on the up slope as seen by the sales numbers.
Fashion is notoriously a tough and fickle market, thus SKX was not given the respect by investors they deserved until recently due to it’s product lineup transformation being only a few years old. UA is now the hottest brand out there and has proven itself over many years. It is challenging Nike for the top spot and I see them already surpassing them among teens and young adults.
Not saying UA is a better investment (I think SKX is a much better one at this time due to it’s earnings growth, valuation and lower market cap), but just trying to play devil’s advocate on this board and explain why the market has put a huge premium on UA.
Not saying UA is a better investment (I think SKX is a much better one at this time due to it’s earnings growth, valuation and lower market cap), but just trying to play devil’s advocate on this board and explain why the market has put a huge premium on UA.
This thread revisiting SKX vs UA comes at an interesting time in terms of (as a thread) being interwoven with the FB vs CRTO thread in which posters are discussing targeted advertising which relies on technologically garnering information about users in order to achieve greater profit from knowledge of customers habits and preferences.
Recently, UA purchased MyFitnessPal to expand its own universe into the world of understanding of customers through the tech world. MyFitnessPal is a fantastic (personal experience speaking) and useful app that tracks diet and fitness routines to help users meet personal goals. It has an attractive interface, is easy to use, and when used regularly, aids one to both record and track, and because of that, much more easily meet health and fitness goals. I don’t know if MyFitnessPal is the most popular fitness app, but the health and fitness category itself, is presently the fastest growing app category. The purchase of MyFitnessPal by UA is a very recent purchase, but it is one that I would expect to benefit and add value to UA.
Technology has steadily eroded the traditional boundaries that define what companies do. The improbable is now expected. A search engine makes thermostats and cars. Entrepreneurs are working to replace or embed all of the items that make up our daily lives with computers. The objects around us are increasingly generating and collecting huge amounts of information. This has completely transformed how products are marketed and sold – increasingly too, how they are designed.
It is therefore both surprising and obvious to read that a clothing company has acquired the fitness data of over 100 million people. In a press release, Chairman and CEO Kevin Plank has stressed the importance of “understanding the evolving needs of our athletes – how they interact, how they consume, and ultimately how they strive to live healthier lifestyles.” This move will allow Under Armour an unprecedented picture of their customers’ habits.
http://www.forbes.com/sites/tarunwadhwa/2015/02/09/under-arm…
okapimoon
I was a late holdout, but did finally purchase Skx.
I still am not a personal fan of the product, but saw that many others felt differently.
Keeping an open mind, I did open a position…that position is handily beating the returns of UA since that time…
Saul,
I sold about 16% of my UA shares and opened a position in SKX.
Since then, UA has gone down and my shares in SKX are up 44%.
Thank you,
mazske
MKL TG
Check my profile to see all of my holdings
I sold half my UA at 84 and the other half later at 77. I added a little to SKX at that time but it was already pretty big for me. SKX is my 4rd biggest winner ever (behind AMBA, NFLX and TSLA, for now). Thanks!!!
ps- for casual wear, as long as you don’t care about how they look, Skechers’ GoRun Ultra 2 are a real treat. It’s like walking on marshmallows.
Our discussion about SKX vs UA illustrates beautifully the difference between the classic MF buy and hold method vs the Saulocratic investment technique. UA will continue to be listed as a best buy over and over for the next few years. UA is a fantastic company that will continue growing for many years, but clearly has become over valued. If it drops in price in the future to a good valuation, I will buy UA again.
When I retire in a couple of years, Saul’s investment approach will enable me to completely live off of stock investments.
I am very grateful for this board because I have learned a more nimble and flexible investment style that will pay much larger returns for the remainder of my investment days.
Jim
Yes siree Saul!
I owned some postions early and since have increased the total SKX to 7.86% of portfolio. This includes holdings which I manage in:
*Several “grand” children accounts
*wife and daughter accounts
*my accounts
Also, I own 2 pair of SKX shoes … very nice.
All send their kind thanks!
Mark
SKX was my first position from this board, and I again thoroughly appreciate the good ride so far. Thank you Saul at el.
Hex
WOW…SKX at $109…