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Fitness apparel maker Under Armour Inc (NYSE: UA) has had an amazing run so far, but the question now being asked is whether or not that run is over -- and it looks like 37% of investors believe it just might be.Here's a quick history lesson on Under Armour. The stock went public in November of 2005 and traded at about $25. Since then the stock has steadily climbed to its current price of $64.38, or a gain of about 155%. Wow.
However, Under Armour is now at a point where investors are having a tough time believing this bullish run will continue. The Baltimore Sun highlighted the dilemma in this morning's paper, pointing out that 37% of UA's stock is owned by short sellers -- good enough to make Under Armour the 25th largest short sold company on the New York Stock Exchange.
The 37% of doubters seem to have an awfully good point here, at least at this price point (I'd hate to think of the price points that some of them got in at). Retailers reported disappointing sales for the month of July, another sign of the weakening consumer and overall economy, amid the market's current volatility. It's just not advisable to be long a stock like Under Armour right now, not with such a large red flag being raised.
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Reader Comments (Page 1 of 1)
8-13-2007 @ 9:33PM
Deep_Blue said...
I think you are wrong here - walk around any Jr. and Sr. high and what are they wearing? It's not their parents nike and rebook stuff. Just like they don't like to be dressed in GAP, they don't like their parents brands. btw you ever see their stuff on sale?
Short at your own peril.
8-14-2007 @ 5:19AM
Brandon said...
Economy shmeconomy! I'm a professional athlete and UA is the way. So many athletes are starting to sign with UA your head will spin, just wait till football season when that's all you see. Shorters will soon learn their lesson, take your gambling to another stock!
8-14-2007 @ 6:25AM
Eric Buscemi said...
I should clarify that I did not suggest shorting UA, I was just noting that I feel there are better places to go long.
Eric Buscemi
8-14-2007 @ 10:47AM
Larry said...
I'm glad to see 37% short sellers. Shorts are not long term investors, so every short is a buy order waiting to happen. When UA blows away numbers again, the shorts will cover and the stock will jump 10 points in a day. This is what caused the last huge run up in the stock after they released earnings. I bought CROX when there was 42% short sellers. My cost basis was $24. It's at $52 now because all those shorts scrambled to cover. In addition, when there is that much stock short, brokers don't have as much stock to lend so it will be hard for the short % to rise much higher.
8-15-2007 @ 10:47AM
Lee said...
I agree with deep-blue and brandon. My son played high school football and these kids wore UA gear like there was no tomorrow. I got excited when I walked into Cabella's - a major outdoor sporting goods store and saw UA apparel on the racks. UA is getting global distribution, brand extension and has major brand recognition. They are expanding beyond pure sports. Small company, focused and high quality. A long-term winner.
9-17-2007 @ 1:49PM
Cindy said...
UA is the future of material. I think it will go long and so does alot of the younger set. All the pros use it. Try it you'll love it
9-17-2007 @ 1:50PM
Cindy said...
UA is the future of material. I think it will go a long way and so does alot of kids. It is the material on the uniforms the pros use.