Okay, Jim. You and Pam and all the others who have written in about how much they like the company and the stock have convinced me. I’ll take a little dip-my toe-in-and-put-it-on-my-radar position in UA and see where I go from there.
Thanks for being persistent.
Saul
< Assuming UA will be Nike in 10 years, we might expect UA to have a similar market cap to what Nike has today… In this scenario UA’s market cap would grow 159% for a future UA share price of $181 and an annualized return of 10.0%.
Chris, the problem with that calculation is that I wouldn’t hold for ten years until it became an old slow grower. If I bought some, I’d hold it while it was rapid growing and when it slowed down after four or five years I’d probably get out.
Best,
Saul
Chris, the problem with that calculation is that I wouldn’t hold for ten years until it became an old slow grower. If I bought some, I’d hold it while it was rapid growing and when it slowed down after four or five years I’d probably get out.
Saul,
I’m really on the fence with this one. I’m debating with myself on whether to hold or sell. I bought in 2011 for around $16 per share. If I sell, I’ll pay $10 per share in taxes.
The P/E has traded between 30 and 70 from 2007 through recently. Now it’s at 90. This is not based on adj earnings but I’m using using it for valuation purposes…just to gauge good entry points and sell points. Based on the prior range, today’s price seems a far better exit point than entry point.
I do believe that strong sales growth is ahead for UA. They’re just starting to sell internationally and I think they’re just beginning to go after women. I can imaging that their advertising/marketing spend per dollar of revenue will decline as they continue to grow sales. I’m not sure what to make of their recent $150M acquisition of MapMyFitness; is this a marketing related acquisition or will they go into wearable sensors? Or do they have something else in mind?
So I really love the growth and future prospects but I really hate the price.
So back to your comment on getting out before they become a slow grower. Would you intend to predict that and get out before their financials show they are becoming a slower grower? If you react to an earnings report that shows slower growth then it might be too late because the sky high P/E will probably have dropped by then.
Chris
Hope you all don’t mind if I chime in again. Yes, I believe a great deal in the Under Armour brand. Very much so. As I said in my previous post, it is my highest conviction stock. I see years of solid growth ahead. I do, however, think the stock is very highly valued at this point. As much as I love the company, the story, the products, I will not be adding to my UA position at this price point, but I am still look for future buying opportunities.
Thank you Chris for your time and effort in the comparisons with Nike. While I personally believe that UA can someday challenge Nike in sales, that day is, as you illustrated, likely down the road a ways. I use Nike as a comparison as they are the indisputable market leader in this sector.
I also want to add that I love this board. Lively, honest, respectful debate. I applaud and thank all who contribute to these discussions. I learn more and more because of your willingness to share your views.
Bill
Long on Saul’s Investing Discussions and UA
So I barely post anything, but this board has gotten me into reading them because of the great info you all post. Thanks everyone!
UA has been one of my favorite positions and has grown to one of my largest holdings of individual stocks.
I should preface this with that I have been heavily involved in athletics and fitness related things for my whole life.
I first bought them in 2008 because I loved the product and thought they would be hugely successful disrupting the fitness apparel world. Even though Nike and other companies had imitations at the time, UA’s quality was better.
In late 2010, I was concerned about valuation and the size the position had grown to. I had also tried out crossfit, and the gear they made seemed to not wick as well as it used to… maybe it was the workouts, but I was less happy with the product and I didn’t like their first foray into shoes. I sold half to buy LULU, which almost every woman in any gym was wearing at the time. I figured I’d diversify companies based on gender preferences for workout attire.
That would have been a great move… if I had sold that part of LULU and got back into UA or anywhere else once the LULU bad news started coming out.
That said, UA has kept growing, the gear they have now is better than ever (haven’t tried the new shoes though), I see more women wearing UA gear too, they keep innovating, they have been experimenting with wearables with things like force sensors to gauge head impacts from hits, and I’d guess the MapMyFitness thing is related to that given that all the fitness tracking things like fitbit have become popular with a lot of people (though I don’t really see the point of them), they also provide gear to a lot of colleges and to that end will continue to innovate new and better products for high end athletes.
So, lots of good reasons to keep holding for more growth… however I’m starting to feel a bit uneasy about the size of my position given the valuation.
Long UA but considering trimming my position at the moment.
http://seekingalpha.com/article/2348865-why-under-armour-has…
This is a good SA article that came out today showing why UA has the potential to continue moving aggressively upwards for at least a few more years. Its runway is long and we have plenty of time for additional purchases if our premise is correct.
My recommendation is to buy UA on the inevitable dips that the market will give us. My best performing stocks are those which were bought in small doses over a period of years.
UA is at an all time high and now is probably the very worst time to make a large purchase. I love how Saul puts it: “…take a little dip-my-toe-in-and-put-it-on-my-radar position…” for now.
Jim