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It seems the fundamentals of lulu are very good. Beating estimates. The snag of the CEO leaving and the see through material seem to be a temporary snag but the stock fair value is about 76. What are some views of yours? Conventional wisdom is to buy when others are running away. Does not work if the company is going bankrupt. But lulu seems to be a good company. Another one is GRA, even though its coming out of bankruptcy it seems like its a bit high for a buy.
From all the comparisons and reviews I read, most women seem to like, no Love their LULUs. They say they last forever and would not part with them. Brand loyalty to this brand is very strong. I think a small amount in it at this level may be a good buy and its got a very high potential for growth.
.........the stock fair value is about 76. What are some views of yours?..........
Not sure what you mean by fair value.
Book value is about $6, and it is normal to trade at several times book. 11 times book is about the limit for me, though.
And it has a P/E of 35. That's too high for me, too.
Other than that it is a good, profitable company. It will probably be among the first ones to tank in case of a market correction or recession, though.
Not sure what you mean by fair value.
Book value is about $6, and it is normal to trade at several times book. 11 times book is about the limit for me, though.
And it has a P/E of 35. That's too high for me, too.
Other than that it is a good, profitable company. It will probably be among the first ones to tank in case of a market correction or recession, though.
I found an example of what I'm talking about.
Look at ASYS:
There are 9 million shares outstanding.
Shareholders equity is 82 million.
That gives a book value of $9.
It trades at about 5.00 - except for today. Today it is up 15% because they announced new big orders. But, still, take a look at the chart and you can see the trend. Buying at a discount to book is sometimes - but not always - a good safe way to go. Sometimes stocks sell at a discount to book because they are on their way out of business.
you can't really use valuation to buy stocks.. it just doesn't work. Wall street likes hot companies, new ideas, and the prospect of future growth. It's why TSLA and DDD are through the roof.... LULU here seems cheap to me but I've not done my DD, and I still think the market is in correction mode.
Best advice, don't buy high, buy after some amount of correction, which LULU has had.
you can't really use valuation to buy stocks.. it just doesn't work. Wall street likes hot companies, new ideas, and the prospect of future growth. It's why TSLA and DDD are through the roof.... LULU here seems cheap to me but I've not done my DD, and I still think the market is in correction mode.
Best advice, don't buy high, buy after some amount of correction, which LULU has had.
I believe you can and ASYS seems to prove the point. In the above example I show how ASYS has a book value of $9 and sells for $5. Today the market was down 200 points and ASYS was up 15%. How does it work intermediate term?
Let's see.
YTD S&P is up 15%; ASYS is up 70%. And it looks like ASYS has a ways to go just to achieve its own book value.
Wall street does like hot companies. That's how all those people got trapped when the NASDAQ was 5,000. But LORD!, you should have seen (or maybe you were there) the stampede for the door! And most people never made it to the door. There were millions lost. That was 99 - 2000.
I believe you can use valuation to buy stocks, and I believe LULU is a good example. They were over valued before their correction. I think they are still over valued. They turned in quarterly earnings and year-over-year was flat as a cow plop. 47.2 mil this year vs 46.6 mil for last year. For a company with no growth a PE of 36 is a bit steep. Not to mention selling for 11 times book.
How bad is 11 times book? Pretty bad. 3M and Ford each sell for about 3 - 4 times book. Apple, about 4. There are probably some hot retailers that sell for 11 times book, but I would hope they are turning in some great year-over-year quarters.
There are sometimes when stocks that are really cheap seem to get ignored and suddenly get attention. For the longest time I had "IEP" saved to my bookmarks... icahn enterprizes and I have no idea why it surged but it did and didn't notice for a month, I only had it bookmarked because it was crazy cheap and seem to have no volume or interest. It happens...
Another one I have bookmarked for the same reason is CYOU changeyou.com... chinese company so it's dirt cheap.. related to SOHU I believe... but a real company, unlike so many chinese scams.
On another note, everything is selling off the way I had hoped.. I'm gonna be able to buy a platinum ETF, palladium ETF, the ETF "REM" all on sale... and go hard back into the market hopefully as it continues to sell off.. knock on wood... the long bond "TYX" continues to rise interestingly as well.
I've made money going long LULU through the years, went short before the sheerness issue, and double-downed right before earnings. I believe the fundamentals are weakening and I haven't covered my shorts yet. A recent Motley Fool articles shows that some customers are still having sheerness issues with their new products. If you click to see the pictures on the LULU site, it looks like the pants are painted on. The reviews on the products are poor and I think this is just the beginning. It appears that their quality control and production is not what it use to be.
one that seems to defy explanation is ANGI angieslist.. nobody can seem to figure out why the stock is going up on the yahoo boards. Everyone just assumes it's being manipulated so they can do a secondary offering and then they'll crash it.
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