1 Dead Retail Stock in Need of a Grave

Market Foolery tosses dirt on the grave of one retail company, while they see a possible turnaround for another.

Jun 24, 2014 at 12:04PM

On Monday's MarketFoolery, host Chris Hill, Motley Fool One analyst Jason Moser, and Stock Advisor Canada analyst Taylor Muckerman talk about desperate retail founders.

Dov Charney, founder of American Apparel (NYSEMKT:APP), has promised to sue his company after they ousted him. Jason quips that a lawsuit is just what the failing company needs right now and Chris explains the company has lost more than $250 million in the last four years and has $200 million in debt, with some of that debt at a 20% interest rate.

lululemon athletica (NASDAQ:LULU), similarly, is trading at its lowest point in the last three years, and its biggest problem may be founder Chip Wilson, who is teaming up with Goldman Sachs (NYSE:GS) to get his company back. Chris wonders if the company could turn around if Wilson wasn't a distraction. Taylor didn't like Lululemon when Wilson was at the helm, yet he's still not a fan of it. From there, Chris moves the conversation to founder-led companies. Jason adds that "founder-led" is not an investing thesis. At the end of the day, he notes, it just doesn't matter, because if a company is rotten, it doesn't matter who's running it. 

Jason doesn't think that American Apparel can turn around, but he does think that Lululemon can because of the amount of customer loyalty and brand development. Yet Jason and Taylor agree the company will need to move beyond the fad of yoga. Taylor explains that companies like Nike (NYSE:NKE) and Adidas (NASDAQOTH:ADDYY) have sponsored all types of physical activities, which helps the companies have a lasting impact.

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Chris Hill has no position in any stocks mentioned. Jason Moser owns shares of Nike. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs, lululemon athletica, and Nike. The Motley Fool owns shares of Nike. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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