Tag Archives: LULU

10 Stocks That Could Surprise in 2018

The U.S. stock markets hit the jackpot in 2017, with all the major indexes up significantly — the S&P 500 gained 19% over the past year, the Dow Jones Industrial Average was up 25% and the tech-heavy Nasdaq was up an impressive 28% — making year-end assessments by investors a very happy occasion.

Amazingly, the U.S, markets ranked 39th out of 47 countries in 2017, making this past year a relative stinker compared to the rest of the world’s stocks.

Why the “down” year?

It’s possible that investors have figured out that U.S. stocks are overvalued relative to stocks in other countries. So, while U.S. markets underperformed on a comparable basis, it can always be worse, as Canada demonstrates.

In 2017, Canadian stocks gained just 6% on the year with energy companies providing a significant headwind to better performance. Here in the U.S., the major indexes are much less dependent on energy stocks, hence the higher returns.

Given the perception U.S. stocks are overvalued, how does one make money in 2018?

Buy several of these ten stocks that lost 20% or more in 2017.  My bet is that, like the Dogs of the Dow, they will surprise in 2018.

Stocks That Will Surprise in 2018: Under Armour (UAA) Stocks That Will Surprise in 2018: Under Armour (UAA)investorplace.com/wp-content/uploads/2017/02/uamsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/02/uamsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/02/uamsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/02/uamsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/02/uamsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/02/uamsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/02/uamsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/02/uamsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/02/uamsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/02/uamsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

It’s interesting that John Schnatter, the founder and former CEO of Papa John’s Int’l, Inc. (NASDAQ:PZZA), stepped down toward the end of 2017. Yet, Under Armour Inc (NYSE:UAA) CEO and founder Kevin Plank had no such plans despite delivering a lump of coal in shareholders’ stockings.

Plank deservedly is on a list of “Worst CEOs” of the past year with Under Armour’s stock losing half of its value.

In early February, I suggested that Plank should move aside, hiring a more experienced direct-to-consumer retail executive who understands how to sell in an omnichannel world.

A couple of months later I proposed that Under Armour and Lululemon Athletica Inc. (NASDAQ:LULU) should join forces to deliver a more balanced business regarding men’s and women’s customer bases.

Personally, I believe both of these ideas are both valid. Furthermore, I see Lululemon’s CEO, Laurent Potdevin, as the perfect person to lead the merged organization.

Regardless of whether these two things come to fruition, I believe Under Armour can bounce back in 2018. 

Stocks That Will Surprise in 2018: Newell Brands (NWL)

Stocks That Will Surprise in 2018: Newell Brands (NWL)investorplace.com/wp-content/uploads/2017/12/nwlmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/12/nwlmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/12/nwlmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />

Newell Brands Inc (NYSE:NWL) lost 29% in 2017 as it struggled to integrate the Jarden acquisition into its own business. This past year was the stock’s first significant annual loss since 2008 when it saw a drop of 59% due to the economic crisis.

Investors expected that the integration of Jarden would deliver sales growth and higher profits and neither of these has yet to materialize.

Its five-year restructuring process to save $1.3 billion by 2021 has saved $410 million through the end of Q2 2017. Although it’s going as planned, debt levels are still relatively high at $10.2 billion or 65% of its market cap. The company is on track to reduce its leverage ratio to 3.5 times or less by the end of 2019.

Newell has become home to a lot of brands that don’t have the scale to compete in a global world. Moving to four operating segments: Live, Learn, Work and Play, I see the company fine-tuning its focus in 2018 and beyond.

Newell stock hasn’t been this low since 2014. The transformation might be messy, but 2018 should see it turn the corner.

However, if you don’t have 2-3 years to wait for it to complete the restructuring, you’re best to look elsewhere.   

Stocks That Will Surprise in 2018: Mattel (MAT) Stocks That Will Surprise in 2018: Mattel (MAT)investorplace.com/wp-content/uploads/2017/02/matmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/02/matmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/02/matmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/02/matmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/02/matmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/02/matmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/02/matmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/02/matmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/02/matmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/02/matmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

The bankruptcy of Toys “R” Us in 2017 says all you need to know about Mattel, Inc.’s (NASDAQ:MAT) past year. Therefore, it probably doesn’t come as a surprise to most investors that Mattel stock lost 41% of its value in 2017 and now sits 67% below its five-year high of $48.48.

Mattel’s situation has deteriorated to the point that it suspended its dividend in October to save cash and keep the business on a stronger financial footing. It also intends to look to boost its gross margin by focusing on fewer product offerings while cutting staff to lower its operating expenses.

While it’s tempting to look to a Hasbro, Inc. (NASDAQ:HAS) buyout to save the day, it’s very likely that Mattel’s going to have to innovate its way out of the mess it currently finds itself.

None of its major segments are growing, unlike with Hasbro, which has weathered the Toys “R” Us storm far better than Mattel. That said, Mattel’s long-term debt is still only 34% of its market cap which isn’t outrageous for a company its size. 

Don’t get me wrong, buying Mattel is a speculative buy at this point. I would wait for the company to announce its Q4 2017 earnings at the end of January before considering a purchase because it’s entirely possible it will test single digits before bottoming.

With Barbie, Hot Wheels and Fisher-Price, it has got a reasonable shot at a turnaround. 

Stocks That Will Surprise in 2018: Chipotle (CMG) Stocks That Will Surprise in 2018: Chipotle (CMG)investorplace.com/wp-content/uploads/2016/04/cmgmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/cmgmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/cmgmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart Via Flickr

If it weren’t for bad luck, Chipotle Mexican Grill, Inc. (NYSE:CMG), would have no luck at all.

I can remember how some analysts and investors were chastising Chipotle for going overboard on food preparation procedures after its E.coli outbreak a couple of years ago. 2017’s revisit of food safety concerns put the brakes on any chance for a recovery of its stock price which lost 23% in the past year.

Kyle Woodley, a former InvestorPlace editor and very astute investor, recently picked CMG as his “Best stock for 2018” suggesting profits and revenues are growing far more than most investors realize, and while his pick is speculative given the company’s history, the upside seems higher than the downside at this point.

I have to give former CEO and co-founder Steve Ells credit for stepping down in November as Chipotle’s chief executive. It’s never easy to admit that you’re not the one to lead your baby back from the wilderness, but shareholders ought to be thankful that Ells could see that a leadership change was necessary.

Who Chipotle hires as the man or woman to lead the company is critical to bouncing back in 2018. I think the board will make a smart choice with Ells’ input and it will be off to the races.   

It would not surprise me if a former McDonald’s Corporation (NYSE:MCD) executive were at the top of the list.

Stocks That Will Surprise in 2018: Sally Beauty (SBH) Stocks That Will Surprise in 2018: Sally Beauty (SBH)investorplace.com/wp-content/uploads/2017/10/sbhmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/10/sbhmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/10/sbhmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mainstream via Flickr (Modified)

At the end of November, I suggested that investors consider buying Sally Beauty Holdings, Inc. (NYSE:SBH) after dropping $3 in a month. Since then it’s up 18% and should the overall markets continue moving higher early in 2018, I expect SBH stock to do the same.

Sally Beauty’s stock lost 29% in 2017, the company’s third consecutive year of negative returns; it hadn’t had a breakout year since 2013 when it gained 28%. It is due.

Remember, Ulta Beauty Inc (NASDAQ:ULTA), one of specialty retail’s shining stars, also had a negative year in 2017. The coming year ought to be better for both companies.

While the jury is still out on whether the company can reignite sales, the lowering of the corporate tax rate from 35% to 21% should deliver about 36 cents per share in additional earnings.

The company’s biggest weakness has always been its level of debt — $1.8 billion or 75% of its market cap — so I’d look for some indication from SBH management that it is planning to deleverage its balance sheet.

If it does that, given its free cash flow generation, the sky’s the limit for its stock.

Stocks That Will Surprise in 2018: Bed Bath & Beyond (BBBY) Stocks That Will Surprise in 2018: Bed Bath & Beyond (BBBY)investorplace.com/wp-content/uploads/2017/04/bbbymsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/04/bbbymsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/04/bbbymsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart via Flickr

It wasn’t a good year for Bed Bath & Beyond Inc. (NYSE:BBBY), down 44% in 2017. For that matter, it hasn’t been a good decade, losing 2% annually for long-time shareholders.

Eventually, the tide’s got to turn, doesn’t it?

Well, probably not if it keeps delivering woefully poor earnings results like Q3 2017. On December 20, it announced that sales were flat year over year at $3 billion, earnings per share were virtually halved from 85 cents a year earlier to 44 cents this year and comparable sales decreased marginally by 0.3%.

Despite the deterioration in its earnings, the company still generates significant free cash flow. It currently is valued at four times operating cash flow, its lowest level at any time in the past decade and less than half its industry peers.

Yes, the various banners it operates under have seen attrition in both gross and operating margins, yet it’s still expected to earn $3 per share in fiscal 2017.

At seven times earnings, there might not be a better value play than BBBY at the moment.

Stocks That Will Surprise in 2018: Tanger Factory Outlet Centers (SKT) Stocks That Will Surprise in 2018: Tanger Factory Outlet Centers (SKT)investorplace.com/wp-content/uploads/2017/03/sktmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/03/sktmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/03/sktmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/03/sktmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/03/sktmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/03/sktmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/03/sktmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/03/sktmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/03/sktmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/03/sktmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Tanger Factory Outlet Centers Inc. (NYSE:SKT) is an owner of retail real estate focusing entirely on outlet centers. It owns 40 outlet centers in 22 states and another four in Canada. Together, these 44 outlet centers provide 15.3 million square feet for retailers to lease.

Interestingly, the company estimates that there are only 70 million square feet of quality outlet space in the U.S., suggesting Tanger has close to 20% of the country’s leasable outlet space.

That’s what Warren Buffett would call a wide-moat.

Conservatively financed, it has grown its enterprise value by 7.5% annually on a compounded basis since 2005. Also, it’s a prominent grower of its dividend, belonging to the S&P High Yield Dividend Aristocrat Index. In the past three years, it has grown its dividend by 12% annually.

Tanger is an income investor’s dream stock.

Since going public in 1993, it’s never had an occupancy rate lower than 96%, providing investors with considerable comfort that cash flow isn’t going to disappear overnight.

As CEO Steven Tanger likes to say:

“In good times people love a bargain, and in tough times, people need a bargain.”

That’s what makes its business model so strong.

Trading at levels not seen since 2011, I like SKT’s chances in 2018.

Stocks That Will Surprise in 2018: Acuity Brands (AYI) Stocks That Will Surprise in 2018: Acuity Brands (AYI)investorplace.com/wp-content/uploads/2017/08/ayimsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/08/ayimsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/08/ayimsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/08/ayimsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/08/ayimsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/08/ayimsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/08/ayimsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/08/ayimsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/08/ayimsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/08/ayimsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

I recommended Acuity Brands, Inc. (NYSE:AYI) stock on two occasions in 2017.

The first time was in August when I picked Acuity Brands and seven other stocks whose share prices added up to $2,000. Although Acuity is known for its lighting solutions, the company is making a big push into the Internet of Things and while it’s early in that expansion, I can see it being just as successful.

In fiscal 2017 (August 31 year-end), Acuity earned $7.43 per share, 12% higher than a year earlier. With very little debt and steady free cash flow, it has the financial flexibility to drive future growth.

At the end of November, I suggested investors buy its stock on the dip around $160. It has since climbed 10% and is poised to move higher in 2018 on strengthening margins.

Long-term, Acuity might be one of the best stocks to buy on a significant downturn in its stock price.

Stocks That Will Surprise in 2018: Boardwalk Pipeline Partners (BWP)

 

testinvestorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/pipelinemsn-1-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Maciek Lulko (Modified)

Like a lot of oil-related businesses, Boardwalk Pipeline Partners, LP (NYSE:BWP) had a dreadful year, down 23%, erasing a significant portion of the gains it made in 2016.

The operator of natural gas pipelines and storage facilities — in 2016, it transported 2.3 trillion cubic feet of natural gas and liquids — has been on a roller coaster ride the past few years. If oil and gas prices don’t remain where they currently are, investors can expect continued volatility in its stock price.

However, lower corporate and personal income taxes could result in a more buoyant economy. When people and businesses are more confident, they spend more money. Often, that spending comes in the form of automobile travel, which could put upward pressure on oil prices due to increased demand.

For those who aren’t so sure that oil and gas prices can go any higher, you might want to invest in Loews Corporation (NYSE:L), a holding company run by the Tisch family, which own 51% of Boardwalk’s stock.

Over the past five years, Loews’ stock has significantly outperformed BWP — 4% annually vs. -9% — although neither did anywhere close to the S&P 500.

In June 2017, I suggested that Loews take BWP private. Perhaps it will happen in 2018.

Stocks That Will Surprise in 2018: General Electric (GE) Stocks That Will Surprise in 2018: General Electric (GE)investorplace.com/wp-content/uploads/2017/10/gemsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/10/gemsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/10/gemsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/10/gemsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/10/gemsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/10/gemsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/10/gemsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/10/gemsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/10/gemsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/10/gemsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

This last one must be considered the “Hail Mary” of the bunch. I don’t like General Electric Company (NYSE:GE) as a business or a stock because it’s squandered so much shareholder goodwill over the past 20 years by being the worst kind of industrial conglomerate, one that’s afraid of taking chances and is stuck in some time warp.

CNBC Mad Money host Jim Cramer, someone I generally respect, recently apologized to his loyal viewers for continuing to recommend GE stock despite its ongoing slide.

Cramer feels like GE could get it together under new CEO John Flannery. Therefore, he’s still not recommending investors sell the stock. I’m not as convinced. I believe GE’s business could be permanently broken.

In August, I predicted that GE stock would remain in the $20s for the foreseeable future. Since then, GE’s stock has dropped almost 30% on news the company’s problems are bigger than first thought.

That said, any obvious signs of life from GE as we make our way through 2018, should be good for a 5%-10% boost in its share price, perhaps more.

At these prices, GE could very well surprise in 2018.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

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Should You Buy Lululemon Athletica Inc. Stock in 2018? 3 Pros, 3 Cons

Lululemon Athletica inc. (NASDAQ:LULU) is back in shape. It had a rough couple of years, including product recalls and its infamous see-through pants problem. However, management has righted the ship. LULU stock is back near all-time highs, quarterly earnings results are solid, and the company is targeting big expansion plans overseas.

Is this finally the moment for Lululemon stock to start working out for shareholders again? Or will the company’s lingering issues send it tumbling? Here are the pros and cons for LULU stock heading into 2018.

LULU Stock Cons

Not a Cheap Stock: Lululemon is back to a premium valuation, no matter how you slice it. The company is trading at 38x trailing and 27x forward earnings. That’s not anywhere near the industry median for apparel.

The company is at a steep 4x price/sales ratio. And you had better believe in the company’s brand, because there are few other hard assets here. The company trades at more than 7x book value.

That’s all fine and well if Lululemon is able to grow for many years to come. However, if it’s just the first mover on an increasingly crowded fashion trend, those valuation ratios will not hold up over time. Competitors such as Nike Inc (NYSE:NKE) remain dangerous as well.

Is Athleisure a Fad? A long-running point of debate for LULU stock is whether the company’s products are a fad or the marker of a new persistent trend. Both sides make fair points. And to be honest, it could probably still go either way.

That said, Lululemon’s proponents will note that the company has continued its growth well past where initial doubters thought it’d reach. There’s no sign that yoga, as a trend, is dying off either. LULU stock bears, on the other hand, will point to Lululemon’s struggling Canadian sales.

Remember that the company is originally from Vancouver. It developed its brand and market share there first. So it is somewhat troubling that Canadian sales volume is down three years in a row, and by meaningful amounts.

That said, the Canadian economy isn’t performing that well right now, and besides, Canada is only 20% of Lululemon’s business today. Still, declining Canadian sales do suggest that the company will reach saturation on athleisure at some point.

Key Technical Resistance Level: LULU stock has had a bad history with the $80/share level. The stock originally hit the $80 level back in 2012 during its first big growth phase. Shares consolidated and then made another push for $80 in 2013. LULU stock did nothing until 2016, when it again rallied sharply, hit $80, and then went south.

After dropping below $50 earlier this year, investors have given LULU one more chance. Shares are almost back up to the pivotal $80 mark as we await all-important holiday sales figures.

Needless to say, anything less than great numbers, and LULU is going to get turned back yet again at this key overhead level. On the plus side, should Lululemon hit it out of the park for Q4, you’d likely see a large technical move up to the $90 area as traders buy the breakout over five-year resistance.

LULU Stock Pros

Making New Markets: The bulls have a decent retort for the “athleisure is tapped out” argument above. It’s that Lululemon is successfully stretching into new markets beyond just western women.

For one, we’re seeing the rise of male athleisure clothing. Lululemon is up to 18% of its customers being men, and the company sees this moving toward a quarter of its customers within the next few years. It’s unlikely Lululemon will ever be a company whose stores are full of men, but even a modest presence in male athletic apparel can move the needle.

On top of that, Lululemon is largely going abroad for future growth, with initiatives such as “Unroll China.” This year’s Unroll China event had expected participation of 10,000 people across six Chinese cities. There is reason to expect that Lululemon’s brand and products will make a good fit with consumers’ tastes in that region.

Strong Quarterly Results: To break through the long-standing barrier at $80/share and finally make new highs, LULU stock needs a solid holiday season. If last quarter is any guide, things are trending well for the company.

The company grew revenues by almost 14% year-over-year this quarter. That marked the company’s best growth rate since June 2016. The company grew net income by 16%.

That even faster pickup reflected Lululemon’s rising profit margins as it regains pricing power as the memory of the product defects starts to fade. And given the company’s quickly rising cash position, it authorized a sporty new $200-million stock buyback.

Activist Investor: For investors in LULU stock, the last five years have been a disappointment. With the company’s great brand and seemingly strong growth potential, not surprisingly, now shareholders are getting more vocal.

Their wishes for a more active role in management’s strategy appear set to play out. Major LULU stock holder Advent International — which bought out half of the founder’s stake in 2014 — is getting more directly involved.

Lululemon appointed Tricia Patrick, a managing director at Advent, to their board of directors at the end of August. Ms. Patrick previously worked in private equity for both Goldman Sachs Group Inc (NYSE:GS) and Bain Capital.

She brings the sort of activist shareholder value-focused point of view that Lululemon appears to be lacking. While there is no guarantee that activist shareholder strategies can get the LULU stock price up, it’s a reason for optimism.

Verdict for LULU Stock

LULU stock isn’t cheap at the moment. And it’s up against a key resistance level where it has failed many times before. So there is plenty of reason to be cautious right now.

With that said, if you believe athleisure has more room to grow, LULU stock could have a lot more upside. Just wait for a break above the key $80 level. It’ll be a safer trade once the stock breaks out, and short sellers start feeling the need to cover their positions.

At the time of this writing, the author held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek.

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Top Clean Energy Stocks To Invest In Right Now

Former FBI Director James Comey’s testimony on Thursday backed up some of the anonymous-sourced news reports about the FBI, but Comey took exception to one specific New York Times story from February.

“In the main, it was not true,” Comey told the Senate Intelligence Commitee, disputing a February 14 story titled “Trump Campaign Aides Had Repeated Contacts With Russian Intelligence.”

Comey’s comment was part of a broader media critique. But The Times shot back a few hours after his testimony, saying it has found “no evidence that any prior reporting was inaccurate.”

Comey never specified what portions of the story were supposedly wrong.

In a statement, The Times said, “Neither the F.B.I., nor Mr. Comey would comment or elaborate on what Mr. Comey believes to be incorrect. Should they provide more information, we would review that as well.”

At issue is the reliability of anonymous sources and the judgment of news organizations who report information from these sources.

Top Clean Energy Stocks To Invest In Right Now: Coca-Cola Bottling Co. Consolidated(COKE)

Advisors’ Opinion:

  • [By Douglas A. McIntyre]

    Coca-Cola Bottling Co. (NYSE: COKE) had a revenue increase to $2.3 billion in its most recentfiscal year, from $1.7 billion in the previous one. It is moving into Ohio, Indiana, Kentucky, Illinois and West Virginia, which almost certainly will require capital. Its net sales rose 37% in the most recent quarter to $840 million. Management stated this was because of “Organic growth in the legacy territories as well as territory expansion through the acquisition of several new distribution territories from Coca-Cola led to the solid performance.” The current dividend is $1, or 0.66%.

Top Clean Energy Stocks To Invest In Right Now: lululemon athletica inc.(LULU)

Advisors’ Opinion:

  • [By Peter Graham]

    The Q3 2016 earnings report forlarge cap technical athletic apparel stock Lululemon Athletica inc (NASDAQ: LULU) isscheduled forafter the marketcloses onWednesday (December 7th) as the company gets hit by analyst downgrades:

  • [By Diane Alter]

    The Lululemon Athletica Inc. (LULU) stock price is surging today (Thursday) after upbeat earnings and news of a new stock buyback.

    Shares of Lululemon Athletica Inc. (Nasdaq: LULU) soared 20% to $72.70 on heavy volume shortly after today’s opening bell.

  • [By WWW.THESTREET.COM]

    Athleisure apparel company Lululemon (LULU) , reeling from a 23% drop in its stock price last week, has added a veteran of publicly-traded retailers to its board.

  • [By Lisa Levin]

    Lululemon Athletica inc. (NASDAQ: LULU) reported stronger-than-expected results for its first quarter and raised its FY 2017 earnings outlook on Thursday.

  • [By WWW.THESTREET.COM]

    Lululemon will be on fire: Shares of yoga maker Lululemon (LULU) will likely be hot on Friday after a strong earnings beat. Not a totally clean quarter, but it did enough to shake out the growing chorus of haters…for now. 

Top Clean Energy Stocks To Invest In Right Now: Polaris Industries Inc.(PII)

Advisors’ Opinion:

  • [By Steve Symington]

    Polaris Industries Inc.(NYSE:PII)announced first-quarter 2017 results on Tuesday morning, punctuated by a narrower-than-expected net loss, improving retail sales in North America, and stabilizing off-road vehicle (ORV) market share.

  • [By Elizabeth Balboa]

    Supply could come from any number of industry players, including Winnebago Industries, Inc. (NYSE: WGO), Thor Industries, Inc. (NYSE: THO), Polaris Industries Inc. (NYSE: PII) and Camping World Holdings Inc (NYSE: CWH). However, whether it comes from existing inventory and whether suppliers can meet the demand are yet to be seen.

Why Investors Shouldn’t Bet on Lululemon Athletica Inc. Stock

Since mid-October, Lululemon Athletica inc. (NASDAQ:LULU) has pulled off an impressive rally. A key has been a standout earnings report, which saw a beat on the top and bottom lines. Yet it is still important to note that the year has still been fairly choppy, with the overall return for LULU stock at about 21%.

So what’s next? What should investors do with LULU stock? Well, I think the best approach is to be cautious. While the company has been able to get some of its momentum back, there are still some nagging issues.

Let’s first look at some of the pros on LULU stock. First of all, the company certainly has a powerful brand, which has been able to command premium pricing. Lululemon also has a loyal customer base.

As for the financials, they are solid. There is $650 million in the bank and no long-term debt. And here are some other metrics from the latest earnings report:

– Total comparable sales rose by 8%.

– The direct to consumer segment jumped by 26% (showing that the company is getting traction with its online efforts).

– Gross profit increased 16% to $322 million.

– Growth in Asia spiked by nearly 100%, with a 450%+ gain in China.

– The company reconfirmed its goal of achieving $4 billion in revenues by 2020.

So yes, things have been going quite well.

LULU Stock and Competitive Pressures

LULU has been able to manage the competitive threats. But this can only last so long. LULU has to fight tough rivals like Nike Inc (NYSE:NKE), adidas AG (ADR) (OTCMKTS:ADDYY), Gap Inc (NYSE:GPS) and Under Armour Inc (NYSE:UAA).

There are also scrappy startups that have access to large amounts of venture capital, like Kate Hudson’s Fabletics. Oh, and yes, there is buzz that the mighty Amazon.com, Inc. (NASDAQ:AMZN) will make a play for the market.

Actually, there are already signs that the competitive pressures are having an impact. For example, Canaccord analyst Camilo Lyon believes that the recent warehouse sales point to some ominous problems.

In a recent note, he stated: “This increase in frequency of warehouse sales could be in response to slowing brand momentum amidst rising competitive pressure and shifting fashion trends.”

Interestingly enough, his research indicates there is a growing trend toward denim, which is likely to weigh on the company. What’s more, his survey found that 18% of customers plan on buying fewer LULU pants in the coming year

Keep in mind that Lyon has a $45 price target on LULU stock.

Bottom Line on LULU Stock

If you take a look at the chart of LULU stock, it is kind of remarkable. For the most part, there has been a cap at about $80 per share, after which there is usually a notable drop. This has happened twice in 2012, twice in 2013, and once in 2016!

Then again, the fact is that Lululemon has a long history of inconsistent performance, such as with inventory issues. Let’s face it, this is common for any innovative brand.

Will things be different this time around? I would not bet on it. After all, the LULU stock price is already baking in much of the good fundamentals and then some. Note that the price to earnings multiple is at an expensive 39X, but the annualized growth rate for revenues is only about 13%. In other words, it would not be surprising to see yet another pullback.

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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Why Investors Shouldn’t Bet on Lululemon Athletica Inc. Stock

Since mid-October, Lululemon Athletica inc. (NASDAQ:LULU) has pulled off an impressive rally. A key has been a standout earnings report, which saw a beat on the top and bottom lines. Yet it is still important to note that the year has still been fairly choppy, with the overall return for LULU stock at about 21%.

So what’s next? What should investors do with LULU stock? Well, I think the best approach is to be cautious. While the company has been able to get some of its momentum back, there are still some nagging issues.

Let’s first look at some of the pros on LULU stock. First of all, the company certainly has a powerful brand, which has been able to command premium pricing. Lululemon also has a loyal customer base.

As for the financials, they are solid. There is $650 million in the bank and no long-term debt. And here are some other metrics from the latest earnings report:

– Total comparable sales rose by 8%.

– The direct to consumer segment jumped by 26% (showing that the company is getting traction with its online efforts).

– Gross profit increased 16% to $322 million.

– Growth in Asia spiked by nearly 100%, with a 450%+ gain in China.

– The company reconfirmed its goal of achieving $4 billion in revenues by 2020.

So yes, things have been going quite well.

LULU Stock and Competitive Pressures

LULU has been able to manage the competitive threats. But this can only last so long. LULU has to fight tough rivals like Nike Inc (NYSE:NKE), adidas AG (ADR) (OTCMKTS:ADDYY), Gap Inc (NYSE:GPS) and Under Armour Inc (NYSE:UAA).

There are also scrappy startups that have access to large amounts of venture capital, like Kate Hudson’s Fabletics. Oh, and yes, there is buzz that the mighty Amazon.com, Inc. (NASDAQ:AMZN) will make a play for the market.

Actually, there are already signs that the competitive pressures are having an impact. For example, Canaccord analyst Camilo Lyon believes that the recent warehouse sales point to some ominous problems.

In a recent note, he stated: “This increase in frequency of warehouse sales could be in response to slowing brand momentum amidst rising competitive pressure and shifting fashion trends.”

Interestingly enough, his research indicates there is a growing trend toward denim, which is likely to weigh on the company. What’s more, his survey found that 18% of customers plan on buying fewer LULU pants in the coming year

Keep in mind that Lyon has a $45 price target on LULU stock.

Bottom Line on LULU Stock

If you take a look at the chart of LULU stock, it is kind of remarkable. For the most part, there has been a cap at about $80 per share, after which there is usually a notable drop. This has happened twice in 2012, twice in 2013, and once in 2016!

Then again, the fact is that Lululemon has a long history of inconsistent performance, such as with inventory issues. Let’s face it, this is common for any innovative brand.

Will things be different this time around? I would not bet on it. After all, the LULU stock price is already baking in much of the good fundamentals and then some. Note that the price to earnings multiple is at an expensive 39X, but the annualized growth rate for revenues is only about 13%. In other words, it would not be surprising to see yet another pullback.

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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