4-Star Stocks Poised to Pop: Under Armour

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, athletic-apparel maker Under Armour (NYSE: UA) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Under Armour's business and see what CAPS investors are saying about the stock right now.

Under Armour facts

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 92% of the 2,718 members who have rated Under Armour believe the stock will outperform the S&P 500 going forward. These bulls include jjfoolguy and All-Star TMFBreakerTAllan, who is ranked in the top 2% of our community.

Just last week , jjfoolguy wrote that Under Armour has "some of the best products and their marketing is terrific." Our CAPS member concludes: "I believe they will continue to gain domestic and global market share at [Nike's] expense. Sky is the limit for this well managed, innovative company."

It might come as a surprise, but Under Armour is actually the world's leading compression sports apparel company, dominating rivals like Nike and Columbia Sportswear with nearly 80% share of the market. Of course, Under Armour's foray into the footwear world, where well-entrenched giants Nike and Adidas still rule, will certainly prove to be far more challenging. In the most recent quarter, for example, footwear sales dropped sharply, as management continued to tinker with its running and training mix.

However, CAPS All-Stars like TMFBreakerTAllan believe that Under Armour's laser-like focus on quality will ultimately earn it long-term gains in the space:

[Under Armour] has garnered brand loyalty over the past decade. It is now on the verge of being able to expand its core line of apparel and its brand to new product lines and new markets. Over the past few years [Under Armour] has become a much more efficient company and is now poised to handle increased growth without sacrficing margins as it has in the past. More importantly, [Under Armour] has become much more deliberate in entering new product lines like footwear by focusing on performance and quality first rather than mass appeal and adoption. [Under Armour] grew from selling shirts out of the trunk of Kevin Planck's car to almost $1 billion dollars in annual revenue by using this approach and a return to this methodology should lay the groundwork for [Under Armour] to exceed in the longterm.

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