| Stock (Symbol) | Stock Price | |
Lululemon Athletica (LULU) |
$74 |
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| Data is as of | Expected to Report | Sector |
October 3, 2013 |
Dec 12 |
Retail & Restaurant |
| Sharek’s Take | ||
 Lululemon’s been basing for a year-and-a-half yet the P/E is still a lofty 38. I want to buy more shares but the stock’s not cheap enough. LULU has had a couple of issues to work through recently: first a recall of some workout pants and second the company’s CEO resigning. Still, even after these issues the stock has a P/E of 38? That’s high. And LULU doesn’t have its fiscal year-end until Match 31st, so next quarter when I update my data it will still be too soon to look ahead to 2014 numbers. For now we have to sit and wait on this stock, make sure it’s not a big position because I doubt it will go up much in the short-run. |
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| One-Year Chart | ||
 The company is going through a rough period profit-wise due to the recall. Wall Street doesn’t seem to mind. I don’t like the estimated Long Term Growth Rate of only 19%, this used to be a 30% grower. |
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| Earnings Table | ||
 Profit growth was flat last quarter yet sales rose a respectable 22%.Lululemon beat by 4 cents, and its clear investors liked the quarter because the stock’s pretty high. Annual Profit Estimates still haven’t turned the corner. Quarterly growth should pick up in the spring. 2014 should be a very profitable year because we will be comparing against this year’s results. |
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| Fair Value | ||
 What gets me is LULU was getting a P/E in the 30s when things were going well. The P/E should be in the 20s now. There’s not much upside at this level. |
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| Ten-Year Chart | ||
 I expect the company to make around $2.50 next year and if it gets a 35 P/E the stock could get pushed to $88. That’s 19% upside: good not great. This has proven to be a good buy-and-hold investment so I’m sticking with the stock. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
15 of 25 |
Lululemon is in no-mans-land right now. The stock’s not high enough to sell nor low enough to buy into. Keep this long-term winner in your portfolio, just make sure it’s not a big position. LULU is ranked 15th of 25 positions in the Growth Portfolio Power Rankings. It doesn’t have enough upside for the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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