Lululemon athletica inc. (LULU)

Cimoc (91.43) Submitted: 10/17/2008 7:06:49 PM : Start Price: $14.19 LULU Score: +64.01

No debt. That is certainly the way to enter this bear phase. While anyone can point out that the YOY growth is excellent and the gross margins and ROE are better than solid, I have little doubt LULU will outperform based on personal experience.

One a year Lululemon clears out last years stock, overstocks, etc., and they choose a different city for the sale every year. In 2008 it was Calgary, Alberta. They rented a massive venue (the Big Four), hired a ton of temporary staff, set up a dozen or more cash lines, huge communal change rooms and they opened twelve hours a day for 4 days. On day one there were 5 hour, that is FIVE HOUR, lineups just to get in and buy things. Things weren't much better on day two and it wasn't until late in the day on day 4 that you could arrive and make it in to shop without having to wait.

The quality of the product and overall trend in society to a healthier lifestyle suggest to me that LULU is not a passing trend and the current price is a huge opportunity.