Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, athletic-apparel maker Under Armour
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
|Headquarters (Founded)||Baltimore (1996)|
|Market Cap||$3.72 billion|
|Industry||Apparel, accessories, and luxury goods|
|Trailing-12-Month Revenue||$1.15 billion|
Founder/Chairman/CEO Kevin Plank
CFO Brad Dickerson
|Return on Equity (Average, Past 3 Years)||13.9%|
|Cash/Debt||$110.8 million / $13.6 million|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 92% of the 2,828 members who have rated Under Armour believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars Chemdawg and streeter123, both of whom are ranked in the top 20% of our community.
[N]ot crazy about the valuation here, but I love the product line. ... It has a strong brand and it can hold up over longer periods of time. It sells well even when selling for full price.
Over the next five years, in fact, Under Armour is expected to grow its bottom line at a brisk rate of 23% annually. That's much faster than other active-apparel plays like Nike (11%), Columbia (14%), and VF
Currently, I think the stock is a bit overheated, even with the recent pullback, but I'm not selling. Here's what I like:
- Their stuff is very high quality. The sort-of downside to this as an investor is it lasts for a long time, so people might not buy as much of it. But I think the "halo effect" works here, at least with me. ...
- There is lots of opportunity to move Charged Cotton into more categories, like polo shirts. ... They're always expanding.
- UA has a strong brand name. ... And strong brands are usually better at passing through higher prices, which is coming into play now.
- Kevin Plank is extremely ambitious. ... [I]t's always been clear -- he said in the past that he will never sell the company, and will go down fighting if necessary.
What I don't like:
- Inventory issues. They need to fix this soon. Hopefully their statements about meeting potential demand for new products are accurate.
- Free cash flow. Where is it?
What do you think about Under Armour, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Under Armour. Motley Fool newsletter services have recommended buying shares of Under Armour, Columbia, and Nike, as well as creating a diagonal call position in Nike. Try any of our Foolish newsletter services free for 30 days.