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TMFPencils's rating is 99.81.

  • Score: 11447.72 (100th percentile)
  • Accuracy: 70.80% (99th percentile)

A player's rating indicates his percentile rank in CAPS. TMFPencils is outperforming 99.81% of all CAPS players. A player's score is the total percentage return of all his picks subtracting out the S&P. A player's accuracy is how often that player has made correct predictions.

To calculate a player's rating, we take 2/3 of his score percentile and 1/3 of his accuracy percentile. For further information, read the Player Ratings section of the Help page.

Average Pick Score is a player's total score divided by the total number of picks (active and closed). It represents the player's average return after subtracting out the market's performance.

Average Pick Rating is the average stock rating of a player's total picks. Underperform picks are flip-flopped, so a underperform call on a one-star stock is treated like an outperform call on a five-star stock. This rating reflects how closely your picks are aligned with CAPS ratings.

Ratings last updated at 5:41 PM 4/18/2014.

TMFPencils tied the market on Friday

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99.81

Rank: 142 out of 75542
Score: 11,447.72 ( 0)
Accuracy: 70.80%
Average Pick Score: +30.45
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2

Thoughts on Under Armour

April 19, 2014 – Comments (0) | RELATED TICKERS: UA , NKE

Under Armour (UA) is a company I have been closely watching as a potential addition to the Pencils IRA Project portfolio. Under Armour has been an incredible investment over the past several years, increasing 960% in value since 2009. I added the company to my watchlist last month:http://boards.fool.com/pencils-ira-project-watchlist-march-2...

Under Armour is guided by founder, chairman, and CEO Kevin Plank, who founded the company in 1996. Under Armour produces a wide of apparel products and sportswear, most notably for athletes. Speaking from personal experience, I have noticed that much of the sportswear worn by Berea College's athletes is in fact made by Under Armour. There is little doubt that this is a well-respected brand growing in popularity. 

Under Armour has seen sales expand at an average pace of 21.68% annually since 2010. This pace actually accelerated last year, with sales increasing 27.09% in 2013 to $2.33 billion. Since 2010 Under Armour's earnings have increased at an average annual rate of 24.08% to $162.33 million in 2013.

I hesitate to open a position in Under Armour at this point largely because of the valuation. The stock trades at a P/E of 70.75 and a P/S of 4.88, with a market cap of $11.23 billion. (This compares to Nike's P/E of 25.27, P/S of 2.37, and market cap of $65.01 million.) Under Armour will have to maintain significant growth rates to lead to market-beating returns over the next 3-5 years. Over the past year Under Armour has traded in a P/E range of approximately 50-80, and the P/E tended to stay in the range of 40-60 in the two years prior to 2013. So, there are a good deal of expectations priced into the stock today. 

If the company is able to grow earnings at 25% annually for the next five years and trades at a P/E of 45 in 2019, here is what we are looking at in terms of investment returns: 

.75*(1.25^5)*45 = $103.00 

This is just under a double in five years from today's price of $53.06. Still, these are ambitious growth projections. Management is projecting operating income to grow 23%-24% in 2014, so I am not so sure we can confidently expect net income to grow at an average pace of 25% annually for the next five years. (Keep in mind that earnings grew 24% annually over the past five years. As the company grows larger, it will be increasingly challenging to continue growing earnings at this pace.) 

Another concern I have is the fact that Under Armour's cash flow production has been irregular over the past four years. The company produced -$115.86 million of free cash flow in 2013, pushing the company to issue stock and debt to finance a significant increase in capital expenditures (as well as a 39.89% decrease in operating cash flow production). There may be reasons why the company's cash flow production has been up and down over the past several years, but it isn't exactly something for which I am willing to pay a significant premium. 

As I've shown with SolarCity, I don't necessarily mind investing in a business who is still producing negative free cash flow, provided a) there is a great leadership team focused on long-term growth, b) the company is continually improving cash flow production over time (growing operating cash flow faster than capital expenditures), c) there are clear prospects for continued growth. 

In Under Armour's case, I think Kevin Plank is a great leader heading up an innovative business. However, I don't see the growth prospects or sound cash flow performance to back up such a lofty valuation in the present day. If the P/E drifted closer to 40 (or a price of $30 given the current EPS of $0.75), I would seriously consider opening a position in Under Armour. 

I am trying to build more discipline in my investing decisions, and part of this process is recognizing that bargains aren't readily available in today's market. I think there are still some great long-term investment opportunities available today, but I am not sure Under Armour should be at the top of the list. I am watching the company closely and want to do additional research, but these are my thoughts at this point. 

What do you think about Under Armour? 

Best,
David K  [more]

TMFPencils's Stock Picks

Results 1 - 75 of 146 :   1 2 Next »

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Pick
Start
Date
TickerCAPS RatingCallTime FrameStart PriceToday (Change)Stock
Gain
Index
Gain
ScorePitch
03/27/14 FB Outperform 5Y $60.96 $58.94
( 0%)
-3.31%+0.94%-4.25 Toggle the visibility of 60-Second Pitch and replies
03/12/14 LNKD Outperform 5Y $199.68 $175.42
( 0%)
-12.15%+0.08%-12.22 Toggle the visibility of 60-Second Pitch and replies
03/12/14 Z Outperform 5Y $80.38 $95.75
( 0%)
+19.12%+0.08%+19.05 Toggle the visibility of 60-Second Pitch and replies
02/26/14 SHLO Outperform 5Y $19.43 $19.28
( 0%)
-0.77%+0.92%-1.69 Toggle the visibility of 60-Second Pitch and replies
02/18/14 PRLB Outperform 5Y $82.14 $63.43
( 0%)
-22.78%+1.21%-23.98
02/07/14 AMZN Outperform 5Y $352.86 $324.91
( 0%)
-7.92%+4.72%-12.64
02/06/14 AFOP Outperform 3Y $12.05 $17.32
( 0%)
+43.73%+5.53%+38.20 Toggle the visibility of 60-Second Pitch and replies
01/22/14 NGVC Outperform 5Y $41.83 $35.20
( 0%)
-15.84%+1.14%-16.98 Toggle the visibility of 60-Second Pitch and replies
01/21/14 STMP Outperform 5Y $38.39 $33.86
( 0%)
-11.80%+0.91%-12.71 Toggle the visibility of 60-Second Pitch and replies
01/21/14 OLED Outperform 5Y $33.65 $29.42
( 0%)
-12.57%+1.70%-14.27 Toggle the visibility of 60-Second Pitch and replies
01/17/14 TSLA Outperform 5Y $169.38 $198.12
( 0%)
+16.96%+1.22%+15.75 Toggle the visibility of 60-Second Pitch and replies
01/16/14 ISRG Outperform 5Y $416.43 $411.99
( 0%)
-1.07%+1.11%-2.18
01/15/14 SSYS Outperform 5Y $120.10 $100.21
( 0%)
-16.56%+1.25%-17.82
12/26/13 PII Outperform 5Y $142.56 $135.39
( 0%)
-5.03%+1.66%-6.70 Toggle the visibility of 60-Second Pitch and replies
12/24/13 INVN Outperform 5Y $17.33 $21.50
( 0%)
+24.06%+1.91%+22.15 Toggle the visibility of 60-Second Pitch and replies
12/24/13 AMBA Outperform 5Y $28.49 $27.24
( 0%)
-4.38%+1.91%-6.29 Toggle the visibility of 60-Second Pitch and replies
12/24/13 SCTY Outperform 5Y $56.35 $56.72
( 0%)
+0.66%+1.98%-1.32 Toggle the visibility of 60-Second Pitch and replies
12/23/13 SODA Outperform 5Y $52.44 $39.99
( 0%)
-23.74%+2.15%-25.89 Toggle the visibility of 60-Second Pitch and replies
12/23/13 ULTA Outperform 5Y $95.17 $87.79
( 0%)
-7.75%+2.18%-9.94 Toggle the visibility of 60-Second Pitch and replies
12/02/13 DPZ Outperform 5Y $68.43 $74.28
( 0%)
+8.54%+2.89%+5.65 Toggle the visibility of 60-Second Pitch and replies
12/02/13 MELI Outperform NS $110.37 $86.15
( 0%)
-21.95%+2.93%-24.87
11/19/13 FF Outperform NS $16.95 $19.77
( 0%)
+16.64%+3.82%+12.83
11/19/13 LNN Outperform NS $80.28 $88.48
( 0%)
+10.21%+3.82%+6.40
11/05/13 BOFI Outperform 5Y $62.01 $85.30
( 0%)
+37.56%+5.82%+31.74
11/05/13 CPSI Outperform 5Y $58.99 $62.10
( 0%)
+5.27%+5.82%-0.55
11/04/13 CECE Outperform 5Y $17.80 $16.62
( 0%)
-6.65%+5.50%-12.14 Toggle the visibility of 60-Second Pitch and replies
10/29/13 DORM Outperform 5Y $48.90 $57.88
( 0%)
+18.36%+5.35%+13.01 Toggle the visibility of 60-Second Pitch and replies
10/25/13 DDD Outperform 5Y $57.98 $48.17
( 0%)
-16.92%+6.20%-23.12 Toggle the visibility of 60-Second Pitch and replies
10/25/13 AAPL Outperform 5Y $525.10 $524.94
( 0%)
-0.03%+6.20%-6.23
10/24/13 NATH Outperform 5Y $51.50 $50.09
( 0%)
-2.74%+6.56%-9.30
10/23/13 LGF Outperform 5Y $36.50 $26.69
( 0%)
-26.88%+6.62%-33.50 Toggle the visibility of 60-Second Pitch and replies
09/04/13 BRK-B Outperform 5Y $112.07 $127.18
( 0%)
+13.48%+12.41%+1.07
01/25/13 JBSS Outperform 5Y $18.50 $23.40
( 0%)
+26.49%+24.33%+2.16
01/25/13 SPB Outperform 5Y $48.80 $76.92
( 0%)
+57.63%+24.33%+33.30
01/25/13 YHOO Outperform 5Y $20.32 $36.38
( 0%)
+79.04%+24.57%+54.47
01/25/13 SNAK Outperform 5Y $7.07 $12.97
( 0%)
+83.45%+24.53%+58.92
01/22/13 CL Outperform 5Y $52.95 $66.94
( 0%)
+26.42%+25.21%+1.21
01/22/13 COST Outperform 5Y $100.36 $113.50
( 0%)
+13.09%+25.21%-12.12
01/22/13 FDP Outperform 5Y $25.64 $26.55
( 0%)
+3.54%+25.66%-22.12
07/26/10 IMAX Outperform NS $14.05 $27.96
( 0%)
+99.00%+68.53%+30.48 Toggle the visibility of 60-Second Pitch and replies
04/28/08 ARII Outperform 5Y $19.81 $63.22
( 0%)
+219.18%+38.05%+181.13 Toggle the visibility of 60-Second Pitch and replies
04/17/08 PRPX Outperform 5Y $11.34 $11.79
( 0%)
+3.93%+41.78%-37.85 Toggle the visibility of 60-Second Pitch and replies
01/14/08 SNHY Outperform 5Y $12.04 $41.27
( 0%)
+242.85%+37.61%+205.24 Toggle the visibility of 60-Second Pitch and replies
01/03/08 CCJ Outperform 5Y $38.16 $22.80
( 0%)
-40.24%+34.05%-74.29 Toggle the visibility of 60-Second Pitch and replies
11/23/07 LNDC Outperform 5Y $11.80 $12.12
( 0%)
+2.71%+36.49%-33.78
11/13/07 CRESY Outperform 5Y $18.74 $10.79
( 0%)
-42.43%+34.33%-76.77
11/12/07 ARDNA Outperform 5Y $103.44 $126.38
( 0%)
+22.17%+34.48%-12.30 Toggle the visibility of 60-Second Pitch and replies
11/12/07 MRT Outperform 5Y $12.79 $6.89
( 0%)
-46.13%+34.48%-80.61
11/12/07 ZUMZ Outperform 5Y $26.00 $24.10
( 0%)
-7.31%+34.48%-41.79
10/29/07 FCX Outperform 5Y $48.15 $33.01
( 0%)
-31.44%+26.87%-58.30
10/22/07 AKO-A Outperform 5Y $16.91 $19.43
( 0%)
+14.87%+31.18%-16.31
10/01/07 DAVE Outperform 5Y $16.31 $25.22
( 0%)
+54.63%+27.96%+26.66
09/28/07 TSCO Outperform 5Y $11.07 $67.25
( 0%)
+507.71%+27.76%+479.95
09/24/07 FLO Outperform 5Y $8.34 $20.23
( 0%)
+142.63%+28.12%+114.50
08/03/07 JMBA Outperform NS $37.55 $11.62
( 0%)
-69.05%+33.22%-102.27
07/25/07 LOOP Outperform 5Y $22.97 $19.17
( 0%)
-16.54%+29.41%-45.95 Toggle the visibility of 60-Second Pitch and replies
06/21/07 NBFAQ Underperform 5Y $2.59 $0.00
( 0%)
-100.00%+29.87%+129.86
06/15/07 AEO Outperform 5Y $19.37 $10.99
( 0%)
-43.26%+28.15%-71.41
06/13/07 BLOBQ Underperform 5Y $4.00 $0.04
( 0%)
-99.00%+30.63%+129.63
05/31/07 GWR Outperform 5Y $32.40 $96.93
( 0%)
+199.17%+28.46%+170.71
05/16/07 WLP Outperform NS $79.93 $92.00
( 0%)
+15.09%+30.56%-15.46
05/16/07 NSC Outperform 5Y $47.71 $96.27
( 0%)
+101.79%+30.53%+71.26
05/16/07 HAIN Outperform 5Y $29.05 $86.83
( 0%)
+198.90%+30.67%+168.23 Toggle the visibility of 60-Second Pitch and replies
05/14/07 DLIA Outperform 5Y $8.45 $0.80
( 0%)
-90.53%+30.72%-121.25 Toggle the visibility of 60-Second Pitch and replies
05/14/07 CWST Underperform NS $9.34 $5.04
( 0%)
-46.04%+30.55%+76.59 Toggle the visibility of 60-Second Pitch and replies
05/14/07 CBOU Underperform 5Y $6.87 $15.99
( 0%)
+132.68%+30.73%-101.95 Toggle the visibility of 60-Second Pitch and replies
05/14/07 DUNR Underperform 5Y $231.00 $0.90
( 0%)
-99.61%+30.62%+130.23 Toggle the visibility of 60-Second Pitch and replies
05/14/07 PGICQ Underperform 5Y $4.55 $0.00
( 0%)
-99.96%+30.62%+130.59 Toggle the visibility of 60-Second Pitch and replies
05/14/07 DF Outperform 5Y $29.86 $15.52
( 0%)
-48.02%+30.62%-78.64
05/11/07 FZN Outperform 5Y $7.74 $1.19
( 0%)
-84.63%+31.58%-116.21 Toggle the visibility of 60-Second Pitch and replies
04/02/07 CDE Outperform 5Y $41.80 $8.51
( 0%)
-79.64%+38.61%-118.25
03/29/07 E Outperform 5Y $45.38 $51.90
( 0%)
+14.36%+38.59%-24.23
03/27/07 MRH Outperform 3Y $15.19 $30.51
( 0%)
+100.92%+37.98%+62.94
03/26/07 QSII Outperform 5Y $17.48 $15.97
( 0%)
-8.63%+37.32%-45.95
03/26/07 ACAS Outperform 5Y $36.60 $14.66
( 0%)
-59.95%+37.32%-97.27

Results 1 - 75 of 146 :   1 2 Next »

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