UA: Brand vs Company vs Stock

I've been back and forth on UA. Footwear is solid, but apparel rolling. I believe in growth, but not margins. Fundamentally, I think I've nailed it. But collaborating with my Partners has me less beared-up on the stock.

At Research Edge, we're all about empowering our clients with both our process and insight to optimize timing and sizing of a position to maximize Alpha. A massively important part of this process is our morning meeting, which - by a long shot -- is the most thought-provoking forum I have ever had the honor of being part of.

This morning I laid out my recent conflicting fundamental thoughts on Under Armour - and how such solid performance and execution I am seeing in the footwear business, is being offset by far greater promotional spend in apparel than I think is perceived to be the case (even after the company's earnings guide down earlier this year).

That's when my Partner Keith McCullough chimed in with something that sounded like this... The stock acts like death, but short interest is mountainous, and the average hedge fund's short thesis is as stale as a 3 month old loaf of bread. At $27.28 it's oversold, and worth a shot on the long side, provided that you have a catalyst that is better than toxic. The last big volume days for UA were on the up days of the week of May 12th. Sharp and fast squeezing of a consensus short position.

Pardon me for sounding cocky, but I think I can rip apart a business model, and identify what margin and capital structure is needed to achieve a given level of top line growth as good as just about anybody. As good as I think I am in this regard, my team here at Research Edge collectively crushes just about any standard I can conjure up. It is when I can draw upon insight from my Partners here at Research Edge to make 1+1=3.

My thoughts on UA the brand and the business model remain unchanged. But after the 10 minute collaborative valuation/trading discussion, I walked out of our morning meeting more upbeat near-term on the stock.

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more