Investors Turn to Thoughts of Time Travel as Under Armour Gains

Under Armour's stock exploded today, leaving those on the sidelines wishing for a ticket to 2013.

Jan 30, 2014 at 4:32PM

In Back to the Future II, Biff Tannen, the jock-thug from the first movie, gives a sports almanac to his teenage self, allowing young Biff to bet on sports with 100% accuracy. By 1985, Biff is rich beyond imagination. Let's stop there and ignore all the horrific things that accompany the wealth -- death, deceit, destruction, other "D" words that are also bad. As an investor, don't you wish you had a newspaper from 2050, every now and then?

Today's results from Under Armour (NYSE:UA) would be a perfect chance to make bank. The stock is up more than 20% at midday. Actually, it seems like you might just sell the DeLorean.

Under Armour grows like kudzu
Under Armour's pop came from an incredible increase in earnings per share. Analysts expected the company to hit $0.53 per share -- it turned in $0.59. That was a 27% increase over the previous year and it came out of nowhere.

Well, that's not entirely true. Under Armour had a crazy-good year, with quarterly earnings per share rising between 26% and 160% in each of the prior two quarters. For the full year, earnings per share were up 24%. Biff -- if he hadn't already sold the DeLorean -- would be rich.

Recently, the company has had a series of announcements setting it up for a strong 2014 as well. New marketing partnerships, new spokespeople, and big-name teams have all helped build a platform for the year. In addition to U.S. sales, Under Armour is setting up for international growth. This year, it's announced a tie-in with Colo-Colo, an incredibly successful Chilean football -- U.S. soccer -- club.

Think of the exposure Biff could have had if he was able to make big international bets.

The success of 2013 puts Under Armour much further down the path to its 2016 goal of $4 billion in revenue. Under Armour forecasts between $2.84 billion and $2.87 billion in 2014, an increase of more than 20%.

The road ahead
Under Armour's success still pales in comparison to the size of Nike's empire. Nike generated $6.4 billion in revenue in the last quarter alone. While Under Armour is still earning 94% of its revenue in North America, Nike is international like Esperanto. The company made more than half of its revenue internationally.

Under Armour's advantage is speed of growth. That comes at an impressive premium right now, with the stock trading well more than 70 times the company's last 12 months of earnings. Nike is sitting at just 25 times its past year.

As a result, now might not be the best "buying opportunity" for Under Armour -- unless you are very, very confident in its abilities. Hopefully, the company will have a pullback sometime this year and offer investors a better in. There's still a lot of good news ahead for Under Armour, and it would be nice to benefit.

Another chance at success in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

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Everything else is details. 

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