Why Under Armour, Inc. Shares Might Pull Back

Does this analyst make a good case or is it just more noise from Wall Street?

Mar 20, 2014 at 9:27AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Under Armour, Inc. (NYSE:UA) sank 3% in premarket trading Thursday after Stern Agee downgraded the athletic apparel company from buy to neutral.

So what: Along with the downgrade, analyst Sam Poser planted a three-year price target of $170 on the stock, representing about 40% worth of upside to yesterday's close. So while momentum traders might be attracted to Under Armour's strength over the past year, Poser's call suggests that the stock's return potential for 2014 is now limited.

Now what: According to Stern, Under Armour's short-term risk/reward trade-off is pretty balanced at this point. "Lowering rating from Buy to Neutral following a 40% move in the stock this year," said Poser. "We find it difficult to step in now with a 12- to 18-month time horizon given the 65X multiple of our FY14 EPS estimate, though we remain very bullish on the long-term outlook for UA due to the ongoing momentum of all apparel categories, progress in athletic footwear, and the pending material acceleration of international growth." Given Stern's still very bullish view of Under Armour's long-term appreciation prospects, however, patient Fools would do well to take today's downgrade with a grain of salt.

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of 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.

So, here's my index-card financial plan:


Everything else is details. 

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