Friday, October 9, 2015

Under Armour: Fads Tend To End Badly

  • Under Armour continues to trade near all-time highs despite the market weakness.
  • The athletic apparel retailer trades at multiples considered stretched for other fast-growing retailers.
  • Investors need to carefully consider what might happen to the stock when the party ends.



While the market was all caught up with Under Armour (NYSE:UA) raising the sales target at its Investor Day, investors need to keep in mind that retail "fad" stocks don't typically end well. The market has a recent history of Lululemon Athletica (NASDAQ:LULU) to Michael Kors (NYSE:KORS) to even athletic apparel leader Nike (NYSE:NKE) as reasons for caution.

Read the full article at Seeking Alpha.


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