Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's current mess surely qualifies. And when the stock in question is leading footwear and apparel maker Under Armour (NYSE: UA ) , there are many reasons to consider buying shares.
In our Motley Fool CAPS community, an impressive 2,510 investors (out of more than 130,000 total) have shared their bullish or bearish opinions on Under Armour. Poring through the detailed information packed in pitches and other comments, I've dug up three of the top reasons why many members consider the stock a good buy today:
1. Growing popularity
Like branded clothing retailer American Apparel (NYSE: APP ) , which saw big growth last year, the Under Armour brand is also becoming increasingly popular and sought out by fashion-conscious consumers, even in a recession. In an effort to expand its reach into new demographics, the company formed a partnership with baseball Hall of Famer Cal Ripken, Jr., giving its brand greater exposure among thousands of youth-league baseball players.
2. Growth potential
In a rough retail environment that's pressuring many retailers such as Urban Outfitters (Nasdaq: URBN ) , Gap (NYSE: GPS ) , and Target (NYSE: TGT ) , the company remains well-positioned and focused on long-term growth. Under Armour recently launched a shoe line to compete with Nike (NYSE: NKE ) , and it's also made some moves to build its brand in Europe.
3. Strengthened balance sheet
Even in a recession, some companies, such as teen retailer Aeropostale (NYSE: ARO ) , have held up well. Under Armour managed to more than double its cash balance year over year at the end of the fourth quarter of 2008. With that strength came the confidence of creditors, who offered Under Armour a higher credit facility of $180 million, replacing the existing facility, which tops out at $100 million. The move has strengthened Under Armour's liquidity and given many CAPS members increased confidence that the company can prudently manage the volatile market and emerge stronger on the other side.
Of course, there's a lot more devil in the details of these buy-side opinions, which is why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about Under Armour, just click on over to Motley Fool CAPS and have a look -- it's all free, and your opinion is welcome, too.
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