The stock market is a complex and often confusing place, where divining meaning from seemingly mundane actions can require an excellent sense of intuition and a keen eye for detail. Nevertheless, recent activity surrounding Under Armour Inc. (NYSE:UA) has caught the attention of market analysts around the world, as &HBK Sorce Advisory LLC recently purchased 14,578 shares of the company’s stock during the 4th quarter of this year. Valued at approximately $130,000, this stake represents more than just a minor investment in one of the biggest names in global sportswear; it is also indicative of the growing interest that financial firms have shown in Under Armour’s potential for success.
Of course, it’s not enough to simply take this news at face value; anyone hoping to glean true meaning from these developments must do their due diligence and examine all available data with both a critical mind and an analytical eye. Fortunately, such information is readily available thanks to Under Armour’s most recent earnings report for Q1 2019. Released on May 9th of this year, this report contains valuable insights into both the current state of Under Armour’s finances as well as its future growth prospects.
According to their latest earnings report, Under Armour had an EPS (earnings per share) of $0.18 for Q1 2019 along with quarterly revenue totalling $1.40 billion dollars. These figures are certainly impressive given what has been a tumultuous time for many companies operating within the sportswear industry – but they don’t tell us everything we need to know about how investable UA stock truly is.
For that reason, it’s important to take a closer look at some other key metrics contained within their Q1 report – specifically returns on equity (ROEs) and net margins – which give us a better idea of how efficient they are at generating profits relative to their shareholders’ investments in them. Fortunately, Under Armour has some impressive numbers here as well: their ROE for Q1 came in at 14.44%, while their net margin was 6.55%.
Taken together, these statistics paint a picture of a company that is not only weathering the current downturn in the retail market but is in fact thriving despite it. Moreover, the acquisition of shares by HBK Sorce Advisory LLC demonstrates that Under Armour’s potential still has yet to be fully recognized by investors and traders alike. Whether one is an experienced Wall Street insider or simply an individual seeking to achieve financial independence on one’s own terms, there exists plenty of reasons to believe that now may be the perfect time to take a closer look at UA stock – and reap the rewards of foresight and shrewd investing later on down the line.
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Hedge Funds’ Purchase of Under Armour’s Shares Suggests Optimism and Growth Potential
Under Armour’s stock is currently being closely watched by investors and traders as it has had a tumultuous year. However, recent purchases and sales have suggested that hedge funds see promise and potential growth in the company.
According to recent reports, several hedge funds have bought and sold shares of Under Armour in recent months. Ensign Peak Advisors Inc, for example,stake in the company during Q3 2020 valued at $26,000. Similarly, Romano Brothers & Company acquired a new position in the fourth quarter worth $27,000. Heritage Wealth Advisors also boosted its holdings in Under Armour by a staggering 37,500% during Q4 2020.
These purchases suggest that despite facing numerous setbacks such as stiff competition from rivals such as Nike and Adidas and the ongoing COVID-19 pandemic’s effect on sales, Under Armour still possesses growth potential that can be leveraged effectively.
Several factors are working in favor of Under Armour too; with vaccinations rolling out, there is optimism about returning to pre-COVID normalcy. The company has also made strategic decisions such as saving costs by cutting expenses to boost profitability while simultaneously spinning off non-core assets like MyFitnessPal to streamline the business further.
Despite having a price-to-earnings ratio of 8.22 at present- which indicates that it may be undervalued compared to similar companies within the industry – UA stock currently opened at $7.07 on Friday. Previous strong volumes when picking up shares could result in an increase in UA’s stock price soon seen from their lowest level since March last year of $6 but are still below their level of November last year ($13).
Moving forwards into Q2 2021 could bring significant improvements with the lifting of restrictions and plans for increased marketing following discussions with their agency partners including Dentsu’s Merkle they expect optimal support across search engine optimization (SEO), paid search and display advertising.US GDP reports for Q1 were double initial projections indicating that recovery post pandemic is imminent. As such, investors may want to keep an eye on Under Armour’s stock and the potential it holds in a market poised to rebound shortly.
With a market capitalization of $3.14 billion, Under Armour will undoubtedly look to its strategic operations and forward-thinking projects as drivers of year-on-year growth to recover from the effects of the pandemic frenzy.
