UA is a better investment than SKX

Value? Growth? apparently it has it all. But the stock just does not move up. When will it?

Under Armor is moving up. That looks to be a better investment than Sketchers.

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You might be surprised if you compare the 2-year charts.

You might be surprised if you compare the 2-year charts.

2 years is short term by Foolish standards.

The 10 year chart tells a different story.

I suppose it depends on whether you subscribe to the Buffet style LTBH, or the Saul modified version…

Ian

The 10 year chart tells a different story.

So why didn’t you tell us 10 years ago?

I don’t mean to sound aggressive - this is the fundamental distinction in assessing investments in the moment rather than with an arbitrary hindsight. Saul didn’t own SKX 10 years ago, it’s just that two years (or one and half?) ago he looked at the market and SKX looked to be promising. He’s got a pretty good track record.

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So why didn’t you tell us 10 years ago?

I don’t mean to sound aggressive - this is the fundamental distinction in assessing investments in the moment rather than with an arbitrary hindsight. Saul didn’t own SKX 10 years ago, it’s just that two years (or one and half?) ago he looked at the market and SKX looked to be promising. He’s got a pretty good track record.

I don’t know what you inferred from my remark - I was simply pointing out that looking at relative performance over two years is rather arbitrary when comparing two stocks.

Many at The Fool use a very long term horizon - Saul doesn’t.

Saul’s method works for him and he talks a lot of sense. I have made many successful investments from stocks that I first came across on this board, and a few that I have invested in as a result of comments made by Saul. As regards the stocks in question I am long both SKX and UA.

DG and TG also have great records.

My comments were not meant to imply that either method was better than the other - just a whimsical throwaway line about personal preference.

If I knew with certainty what stocks were going to perform ten years in advance, I wouldn’t be hanging around on this board - I’d be sipping a whisky sour on my yacht in Monaco…

Ian

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I was simply pointing out that looking at relative performance over two years is rather arbitrary when comparing two stocks.

I’m sorry, I don’t see how the period where this stock has been recommended on this board could be described as “arbitrary”.

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It doesn’t matter what time period you look at in hindsight to back up which stock is going to be a better investment in the future.

All that matters now is stock performance going forward, and I agree with Saul currently, and I’m betting that SKX does better than UA in the medium term.

FYI, I still own both, used to own lots of UA and no SKX, but from learning on this board, I sold a bunch of UA and have rolled it into SKX over the past year. Now I’m probably 3/4 SKX and 1/4 UA.

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I think both could be good investments. Personally, I own SKX. The growth rate, p/e, company seem to offer more value, more potential at curent value, and less risk with the contracted p/e. I also own NKE, and some point may get into UA as well. I don’t see it as having to be one or the other. Just for me, and I imagine a few others here as well, SKX makes more sense for them.

Kevin

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Does anyone have practice in calculating intrinsic value? It would be very instructive if we could compare Nike, UA, and Skechers, and maybe even Adidas.

I’ll cheat and give the “growth prices” given at vuru.co with their default 15% discount rate. In parenthesis is the current approximate share price. The third price is the “stability price”, which assumes that the company maintains its current profitability. (They don’t cover Adidas.)

NKE - $50.20 ($56) $34.34
SKX - 13.05 ($30) 31.50
UA - -2.44 ($40) 22.94

Nike’s numbers are the least surprising of the three, since it’s share price has been drifting downward for a couple of months or so.

The implication is that UA stock would be the most affected by bad news, since expectation of high growth is built into its current price.

I don’t understand Skechers’s values, especially with a forward P/E of only 12.

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http://seekingalpha.com/pr/16542207-skechers-expands-europea…

Some good news for SKX in Europe! Looks a massive investment. I hope they have sprinklers and fire insurance!
Ant

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