| Stock (Symbol) | Stock Price | |
Lululemon Athletica (LULU) |
$64 |
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| Data is as of | Expected to Report | Sector |
June 21, 2012 |
Sep 7 |
Retail & Restaurant |
| Sharek’s Take | ||
 Lululemon just slowed from hyper-growth mode into growth mode. Here’s a few reasons why:
Retailers are getting hammered after lowering guidance. LULU could lower guidance more next quarter, and the stock could fall. Right now this is still a great long-term growth story, just don’t have this stock as a top holding in your portfolio. |
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| One-Year Chart | ||
 LULU dropped some after reporting last quarter. The stock rebounded some this week with the market, but I think this is a good time to sell some shares.At 40 times earnings with 19% growth expected last quarter, the stock is a little overvalued. |
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| xEarnings Table | ||
 Profit growth was 45% last quarter as sales rose 53%. Sales growth is expected to slow to 33% this quarter.LULU beat the street by only 2 cents after beating by 9 cents 2QtrsAgo. Annual Profit Estimates just fell some. When LULU was tearing it up during 2009-2011 annual estimates were rising. Quarterly estimates look good but not great. These also fell a bit. |
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| Fair Value | ||
 I’m taking my Fair Value P/E down from 50 to 35. LULU is no longer a top-tier stock. |
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| Ten-Year Chart | ||
 Lululemon was in hyper-growth mode in 2010 and 2011 as profits rose 93% and 59%. This year growth is expected to slow to 29%. This type of deceleration usually leads to a stock underperforming. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 15 |
Some of these retail stocks have been hammered recently after lowering guidance. I see warning signs that LULU could warn later in the summer. This stock is also overvalued a bit. Still, this is one of the premier growth stories around and an excellent long-term investment. LULU drops from 6th to 9th in 15 stock Growth Portfolio Power Rankings. I will sell LULU from the Aggressive Growth Portfoliotoday. LULU is no longer a top-tier stock. |
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Aggressive Growth Portfolio
N/A |
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