Tug-of-war investing at Under Armour
Mar 24th, 2009 | By Andrew Snyder | Category: Featured, Stock Market InvestingUnder Armour (NYSE:UA) is under pressure from both sides. Analysts say it is going down, while emotional investors continue to fall in love. Somebody is going to lose.
Before the opening bell, I was chatting with my colleague, Laura Cadden. I told her of my dire outlook for Under Armour (NYSE:UA) and its overpriced and over-hyped product pipeline.
“You can’t say that,” she rebutted. “I love Under Armour.”
Because she is a Baltimore native – the home of Under Armour – it is easy to understand her affection for the company. But once I gave her a handful of figures and circled a few key spots on the stock’s chart, she tossed her emotions aside and agreed with my call.
That’s when it happened.
Shortly after sharing my opinion, in what I assumed was confidence, the news feed fires up and word hits the Street that Morgan Stanley downgraded Under Armour and cut its price target to just $12. The news comes just 24 hours after Caris made a similar announcement.
It was major blow, especially with shares closing yesterday at $18.73.
Tug-of-war investing
I came into the office this morning planning on recommending a short position on Under Armour to TFN Strategic Trader subscribers, but as soon as I read of today’s downgrade, I knew I was too late.
It would have been a perfect play as share price is down by more than 10%.
Just because I called off my plans for the day does not mean the opportunity is totally lost. Under Armour is a great company for trade-savvy investors. Its shares rise and fall in predictable patterns, creating multiple chances to rack up a hefty profits.
Read the full article here at TFN: Tug-of-war investing at Under Armour
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