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Lululemon Athletica Inc. Message Board

  • jaquecroissant jaquecroissant Jun 12, 2013 10:52 AM Flag

    Do you longs understand what entropy means?

    Very simple. Take a look at RAX. Something gets hot, then it cools......very simple. Growth is SLOWING at LULU and that is why Mr. Market is correcting the price of LULU now.

    Sentiment: Strong Sell

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    • Jaque, where do we go from here? High 50's??

      • 1 Reply to newyorknick25
      • It all depends on how much you trust the analysts currently. As we know, they are generally behind the curve in a big way. They are in the process of adjusting the 3 to 5 year projected. Looks like it's actually up a bit today.....now at 22.69. They will change around for a bit as analysts look at the CC.

        My general belief: Take any long term growth rate over 20% with a grain of salt. Discount it by 40% to get a better picture. I've overpaid in the past when looking at peg ratios,etc. You are almost better with just raw ttm p/e. I don't pay over 30 ttm p/e for anything.

        This is now a few days old but here is how I broke it down:

        Analysts currently have the 3 to 5 year projected at 22.62%. First of all, this is too high. The real growth rate is closer to 14% going forward. I use my own method for assessing longer term growth rates.

        Using analysts 3 to 5 yr growth rate of 22.62%. I get a future p/e of 30.79 x 2.58(next yrs eps)= 79.45. This is the FULLY valued price.

        Using my growth of 14%. I get a future p/e of 21.39% x 2.58= 55.19 This is the FULLY valued price.

        I like to buy at a 2/3rds discount to full value. Using my numbers I get .6667 x 55.19 = 36.79.

        Buy at 36.79 or lower. This is subject to analysts changing their numbers over time. Always a moving target.

 
LULU
45.19+1.46(+3.34%)Sep 12 4:00 PMEDT

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