UA will go DOWN
$11.00 on 6/25/09
$18.42 (8.80% from time of market call)
UA is one of the best athletic clothing manufacturers on the market today. I am the happy consumer of many of their products. They have introduced a "moisture/sweat wicking material" to the sporting world allowing athletes to stay cool or warm depending on the variation of clothing they buy and their specific needs. The problem is, I see the true value of this brand being around 16 on the lower end, and 20 on the higher end. With the economic slow down facing all world markets, sales will be low over the next year. Aside from the economic aspect, RBK and NKE have also introduced similar "wicking" material and temperature based clothing.
UA recently introduced a shoe line, and it will be quite sometime before they will be able to see if this new department is profitable or not. Toyota spent almost 3-4 years investing into it's Hybrid department before seeing they are just above breaking even with these cars that have been in high demand. UA is a fairly new company and don't have as much brand recognition as NKE or RBK, and while they are becoming a more common name, it will take time. Also, being a newer company, they are trying to take a share of the shoe market from already well established shoe manufacturers. It will take a long time, and a lot of money, before their foot wear product line can become profitable.
The way I see it:
true value = 14-16
next 3-6 months = drops to 10-12
next 2-3 years = climbs back up to 25-30 possibly reaching 40 again.
I hate to break it to you... but you need to find something else to
do. All three of your stock picks have been pure guesses. There is
no technical or fundamental basis to your claims. Plus you even
ventured to compare Under Armor to a car manufacturer.