Under Armour is valued as a 9 billion dollar company. I truly struggle to believe it.
Compare that to the 20+ Billion Dollar Market Cap in 2015. Shares have seen a 60%+ drop from high to low.
The stock market didn’t crash nor did the world end. This opportunity has just occurred due to some execution errors building up and a confluence of trends and events. This just feels like a LUCKY, incredible opportunity for investors.
Management doesn’t really get casual footwear and have things to improve in many areas, but the brand doesn’t appear to be going away.
It’s funny, at low valuations, IE market bottoms, all the small negatives in a stock or market REALLY stand out. ‘A lot of UA gear is found at TJ MAXX. That doesn’t make sense if they tout themselves as a premium brand?’ ‘What about relationships with their athletes in wake of Plank’s Trump comments?’
My point is those little concerns become magnified at major lows. I think big picture wise, at a market cap of 9 billion, this is a pretty safe entry point. THAT SAID, the important deal here is managing risk on your entry. It’s also the hardest part because at this point it’s mostly discretion.
As you can see in the chart, it’s not like there is a lot of well defined support around this area and there really isn’t until 16 and then 11.5-12. That doesn’t mean buyers won’t show up. It just means that although we think we have a bargain opportunity, there is always risk.
Trade ’em well!
Full Disclosure: I own UA