Medium Happiness

Under Armour may never supplant sporting goods behemoth Nike, but they will be bigger than most people think. And that’s why I think it’s one of the best stocks to buy right now.

A few weeks ago I decided, even in the face of a potentially bearish market, to take another stab at unsupervised investing, ie no broker. I chose Etrade–not my first Etrade account, I might add. I had one back in 2002 but sold everything off when I didn’t get my first job out of college as quickly as I’d have liked. Lesson learned, the 2k I invested back then would be around 20k by now. My first and largest stock purchase with my new account was Under Armour at about $28/share. My confidence in the stock was due, not to jaded analysts predictions, to good old-fashioned, GW-style, listen to your gut thinking. If you keep reading I’ll explain why.

This year I started playing golf again, after taking a hiatus from 1998-2007 (the competitiveness of high school golf is savage and will leave you never wanting to play again). I am glad to report that golf is much more fun when 1. you don’t care about your score 2. drink beer while you play 3. don’t delude yourself walking is a good idea and use a cart (more or less a necessity if you want to indulge in reason #2).

Anyhow, the pleasures of golfing aside, during my first round earlier this year I was blown away by how much Under Armour shit people were wearing on the golf course. I had no idea they even made golf clothes. I went home, snooped around on Google, and found several other people who had made similar, surprised observations about Under Armour’s brand presence not only at the golf course but at other sports venues as well.

Under Armour has not-so-quietly (their in-the-face advertising style is a little abrasive for me) built a very solid following.

Some analysts have expressed concern for Under Armour’s thin margins; their sales are strong but they spend an awfully lot on marketing for every dollar they take in. This is valid, but grossly underestimates their growth potential for the next 5 or so years. I would look for their earnings to surpass even the most optimistic forecasts. Who knows if the analysts bearish on Under Armour have done any observing outside the confines of their beleaguered investment bank cubicle warrens. I tend to think not. Because if they did, they’d see the company, while not great on the books in the short term, maybe, is going to be huge in the medium to long term. I suppose that’s one other thing to consider, this stock could go a ways south before it goes into it’s long and steady climb.