|Day's Range||12.95 - 14.20|
Major stock market indexes drifted down in listless late trading Monday as investors await possible Fed rate cuts and U.S.-Chinga trade talks.
People all over the world wear athletic clothing every day, but Lululemon's international revenue is disproportionally small compared to rivals.
Ralph Lauren (RL) gains from the Next Great Chapter plan as well as strength in international and digital businesses. But sluggishness in the North America segment and currency remain deterrents.
Stock futures: The stock market is looking ahead to Trump-Xi China trade talks. But IBD 50 stocks Lululemon Athletica, ServiceNow, Baozun and New Oriental Education are in buy range.
Stocks have been on fire in 2019. Year-to-date, the S&P 500 is up more than 16%. Over the past decade, the S&P 500 has rallied more than 16% in a full year only three times. It has done so only five times in the past two decades. We are already at that mark today, and it isn't even July.In other words, stocks have had a record-setting performance in the first half of 2019. As the old saying goes, "a rising tide lifts all boats." Thus, as the broader market has rallied big in early 2019, most stocks have rallied alongside it.But, as any good investor knows, no party lasts forever. There's reason to believe this party in stocks will moderate into the end of the year. Depressed valuations supported the big rally in stocks in early 2019. Coming into the year, the S&P 500 was trading around 14-times forward earnings, well below the historical norm.InvestorPlace - Stock Market News, Stock Advice & Trading TipsToday, this depressed valuation support no longer exists. The S&P 500 now trades at over 16.5-times forward earnings, which is above the historical norm for the index. Sustained profit growth can keep stocks in rally mode despite this above-average valuation. But, with valuations now higher than they were before, the big 2019 stock market rally will likely slow into the end of the year.As it does slow, gains across the market will become less broad and more narrow, meaning that we will see a handful of stocks struggle in the back half of the year. * 6 Stocks Ready to Bounce on a Trade Deal Which stocks fall into this category? Let's take a look at six stocks to sell before the stock market party slows down. Stocks to Sell for the Rest of 2019: Under Armour (UAA)Source: Shutterstock At the top of this list of stocks to sell, we have athletic apparel company Under Armour (NYSE:UAA).The bull thesis on UAA stock is pretty simple. You have a beaten up athletic apparel company that has struggled to grow revenues over the past several years, and which operates at depressed margins. But the company has finally cleared its inventory, and management is sounding a bullish tone about growth prospects over the next several years. Thus, there's reason to believe that revenue growth can and will re-accelerate over the next several years, and as it does, profit growth will be doubly robust since margins will ramp from a depressed 2018 base.This bull thesis is legit. That is exactly what will happen. But, it misunderstands one very important thing: valuation.UAA stock trades at 53-times forward earnings. The growth darlings in this industry, Nike (NYSE:NKE) and Lululemon (NASDAQ:LULU), both trade sub-40 forward multiples. They are also both growing revenues faster than Under Armour. Sure, UAA has more profit growth potential because of its depressed 2018 margin base. Even if you model everything out, though, it's tough to justify a $29 price tag on UAA stock today.As such, I think growth will disappoint in the back-half of the year, and that this disappointing growth will ultimately short-circuit the recent rally in UAA stock. Snap (SNAP)Source: Shutterstock Second on this list of stocks to sell in the back half of 2019 is hyper-growth social media company Snap (NYSE:SNAP).Much like Under Armour, the bull thesis on Snap is pretty simple. After several quarters of user base compression, the user base has finally stabilized, and will likely resume growth in the coming quarters as the Android app revamp grows the platform's international reach. With the user base back in growth mode, the company can return its focus to improving the ad business, which should result in advertisers flocking back to the platform. This will result in healthy revenue growth, which should also drive strong margin expansion, and one day produce big profits at scale.Much like the bull thesis on UAA stock, the bull thesis on SNAP stock misunderstands valuation and competition.SNAP stock trades at a whopping 12-times forward sales. Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) both trade around 8-times forward sales. Again, some of the valuation premium is warranted because Snap is ramping growth from a smaller base. But competition concerns are very real here, and could ultimately short-circuit Snap's renewed user growth trajectory and ad growth ramp, especially if Instagram plunges more into commerce and grows young consumers mind-share. If that happens, SNAP stock will fall in a big way from today's elevated valuation levels. * 7 Value Stocks to Buy for the Second Half Net net, SNAP stock has simply come too far and too fast in 2019, and looks subject to a big draw-down in the back half of year in the not-so-unlikely event that the growth trajectory flattens out. Proctor & Gamble (PG)Source: Mike Mozart via Flickr (Modified)Third on this list of stocks to sell in the second half of 2019 is consumer staples giant Proctor & Gamble (NYSE:PG).At first glance, PG stock looks like a great place to hang out right now. This is a consumer staples giant which sells the sort of stuff that will have stable consumer demand forever regardless of the economic backdrop. Thus, with macroeconomic risks on the rise in a late stage bull market, P&G's relatively stable profit growth outlook is attractive. Further, the stock has a juicy 2.7% yield, which looks especially attractive against the backdrop of a depressed 10-year Treasury Yield.The problem, though, is that everyone is looking at PG stock this way, and long Procter & Gamble has become a crowded trade.PG stock now trades at 24-times forward earnings. That's a bigger forward earnings multiple than both Facebook and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Both Facebook and Alphabet grew revenues by over 20% last quarter, have reported 20%-plus revenue growth for the past several years, and project to do the same over the next several years. P&G reported organic revenue growth of 5% last quarter and un-adjusted sales growth of 1%. Over the next several years, this projects as a low-single-digit revenue grower.In other words, the long PG trade has become way overcrowded. Towards the back half of the year, as growth continues to come in at the low-single-digit range, this crowded trade will unwind, and PG stock will fall. Starbucks (SBUX)Source: Shutterstock Another stock to sell in the back half of 2019 is retail coffee giant Starbucks (NASDAQ:SBUX).Much like Procter & Gamble, SBUX stock looks really good upon first glance. You have the world's leading retail coffee company which is using menu innovations and digital integrations to drive re-accelerated positive comparable sales growth in the U.S. At the same time, the company is rapidly expanding in China and has robust growth potential over there, supported by a long unit growth runway. Margins are stable. Profits should head higher. So should the stock.But, there are competition risks here which could hamper the growth narrative in the second half of 2019.On the U.S. front, traffic growth has gone from consistently positive to consistently negative, meaning that positive comps in the U.S. are being driven entirely by price hikes. But, with McDonald's (NYSE:MCD) expanding its presence in the low-price breakfast category and indie coffee shops expanding their presence in the high-price breakfast category, Starbucks doesn't have much wiggle room to hike prices further without risking big traffic declines. This all could come to a head in the back half of 2019, and comparable sales growth could fall back to the flat line. * 5 Stocks to Buy for $20 or Less At the same time, the China growth narrative is threatened by the rapid expansion of freshly public Luckin Coffee (NYSE:LK). In the big picture, the Starbucks growth narrative is sliding on thin ice right now. That ice could break in the back half of 2019. When it does, SBUX stock is liable to fall in a big way. Ulta (ULTA)Source: Mike Mozart via FlickrWhen it comes to stocks to sell in the back half of 2019, one name that comes to mind is cosmetics retailer Ulta (NASDAQ:ULTA).Structurally, there is nothing wrong with the Ulta stock growth narrative. Ulta is the biggest cosmetics-focused retailer in the United States, and has naturally benefited from powerful secular growth tailwinds in the cosmetics industry over the past several years (the rise of selfie-focused and image-sharing apps has led to a rise in consumers wanting to look good, which has led to a rise in beauty sales). This tailwind will persist.Ulta is also benefiting from a healthy unit growth narrative which has consistently powered 10%-plus unit growth over the past several years. This tailwind will largely persist, too. The company also has a strong direct business and healthy margins.But, all of those tailwinds are slowing down and they will continue to slow. ULTA stock simply isn't priced for this slowing to persist.In 2017, comparable sales growth was nearly 16%. In 2018, it fell to 11%. Last quarter, it was 7%. For the full year, it's expected at 6.5%. Digital sales growth and unit growth have followed a similar deceleration trajectory. Meanwhile, operating margins are flattening out.The Ulta growth narrative is slowing. But, ULTA stock trades at a 52-week high valuation of nearly 28-times forward earnings. A 52-week-high valuation coupled with a slowing growth narrative? That's not a recipe for success. As such, as those two divergent dynamics converge in the back half of 2019, ULTA stock could drop. Zoom (ZM)Source: ZoomLast, but not least, on this list of stocks to sell for the rest of 2019 is IPO darling Zoom Video (NASDAQ:ZM).Zoom is a great company. Video conferencing is the next big leg of growth in the enterprise communication world. Zoom is at the heart of this video conferencing growth narrative and has emerged as the hottest player in that market. Revenues rose more than 100% last quarter. Importantly, gross margins are in sky-high 80%-plus territory, the operating expense rate is rapidly falling, and the company is already profitable.This rare combination of early profitability and big revenue growth has investors drooling over ZM stock. Consequently, the stock has nearly tripled from its IPO price.But, this rally seems overdone. The video conferencing market is big. But not that big. Plus, there's a ton of competition in this market, and Zoom is actually one of the smaller players. Sizable competition and a limited addressable market are two going concerns here. If you math out the company's long term potential, it would take some awfully bullish assumptions to justify a $100-plus price tag for ZM stock today. * 6 Stocks Ready to Bounce on a Trade Deal Broadly, then, ZM stock just seems to have come too far, too fast, during its IPO honeymoon phase. Eventually, this honeymoon phase will end, reality will sink in, and Zoom stock will drop.As of this writing, Luke Lango was long NKE, LULU, FB, TWTR, GOOG, MCD, and LK. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post 6 Stocks to Sell in the Back Half of 2019 appeared first on InvestorPlace.
Stock futures: Canopy Growth reported a wider-than-expected Q4 loss. PayPal, Lululemon Athletica and Exelixis moved overnight on news.
Lululemon Athletica (NASDAQ:LULU) stock has been the North Star of retail clothing stocks for more than three years now, averaging more than 37% annually over that time.In the past 12 months, the stock is up 47%. Year to date, LULU stock is up 55%. And the crazy thing is, with this strong, consistent multi-year growth, the price-to-earnings ratio on the stock is below its average annual stock price growth. That means it's trading in line with the market's valuation of this company, even though every recent quarter Lululemon stock has blown past analysts' expectations.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIts recent first-quarter numbers are a perfect example. Not only did LULU stock easily beat earnings and revenue expectations, but it registered a 14% increase in same-store sales compared to Q1 last year. The market was expecting 11.6%.Same-store sales is where a lot of retailers have been falling down in Q1. Consumers continue to spend but, in many other retailer stocks, single-digit same-store sales are doing well. Outperforming expectations like this is a very bullish sign.What's more, LULU stock raised expectations for the year. This has also been the downside of some companies who have posted strong numbers for the quarter but then lowered expectations for the rest of the year. * 6 Stocks Ready to Bounce on a Trade Deal In Lululemon stock's case, there may be a weaker-than-expected Q2 if the trade war continues. The latest round of tariffs began June 1, so their effect will be felt moving forward, especially if the U.S. puts tariffs on all Chinese goods. This is the only real curve ball ahead for the company.But while LULU stock continues to build its base it is also diversifying its core market. Lululemon Stock Is in Expansion ModeInitially only owning premium athleisure for women, LULU is now in expansion mode. It has built out its e-commerce business and is expanding its brick and mortar presence.Along with that expansion Lululemon has begun to offer yoga classes in some stores. It also keeps a tight rein on its brand, so it has complete control of its margins. This is one of the secrets of its success.Lululemon has even expanded its brand to include men's and children's lines as well. It has also launched a membership program that's still in beta testing, and just this week announced that it's going to begin a line of personal care products with Sephora.The line of deodorant, skin care, face moisturizer, and dry shampoo will be available in 50 stores in North America as well as online at lululemon.com, select studio partners, and Sephora.Currently, my Portfolio Grader tool rates LULU stock a B, given its strong run this year and the question marks around a slowing economy and the trade war with China. But it sounds like the Federal Reserve will step in if necessary to keep the economy on track, alleviating some risk moving forward.Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post Best Stocks for 2019: Lululemon Stock Looks Ready for More Growth appeared first on InvestorPlace.
Dow Jones stock Nike is testing a new buy point. But shares have lagged the broader market in recent months while earnings growth has cooled. Is the athletic apparel giant a good buy now?
Shares of Nike (NKE) have fallen nearly 4% over the last three months after the sportswear powerhouse warned Wall Street of slowing growth last quarter. Here's what to expect from Nike's top and bottom lines, as well as its key regions: China and North America.
Lululemon Athletica Inc. has quietly closed its men’s standalone stores in New York City. The Vancouver, Canada-based retailer confirmed that the small-format location — located in Manhattan's Soho neighborhood — was folded into a bigger Lululemon store nearby. Customers respond better to Lululemon “as a dual-gender brand,” spokeswoman Erin Hankinson told Bloomberg News, adding: “We continually test and learn at Lululemon — which is what we did with the men’s stores.” A small-format men’s location in Toronto, dubbed “The Local,” has also closed.
lululemon (LULU) announces the launch of Selfcare line of personal care products like deodorants, moisturizers, shampoos and lip balm.
Lululemon Athletica got a boost after it announced the rollout of its Selfcare toiletries line and a partnership deal with Sephora.
We think all investors should try to buy and hold high quality multi-year winners. While the best companies are hard...
Lululemon Athletica Inc. said Tuesday that it is launching a line of personal care products for men and women online, in 50 Lululemon stores, at select North American studio partners and on Sephora.com. The Selfcare line includes deodorant, dry shampoo and face moisturizer with items for men and women. Lululemon's Chief Product Officer Sun Choe called the new line another way to respond to "feedback that transitioning from sweat to life isn't always easy." The Selfcare line is a product of a two-year research and development process. Lululemon stock is up 1.4% in Tuesday trading and up nearly 53% for the year so far. The S&P 500 index has gained 16.5% for the period.
LULU stock continues to outperform in the retail sector thanks to outstanding earnings and sales growth in recent quarters. But does that make it a buy?
VANCOUVER, British Columbia, June 18, 2019 /PRNewswire/ -- Today, lululemon unveiled its newest product line, offering a variety of personal care products for guests, following a successful test earlier this year. Designed to create solutions for athletes' needs, the new dual-gender line consists of four products that focus on seamlessly bridging the gap from sweat to everyday life. The product will be sold online at lululemon.com, in 50 lululemon stores, at select studio partners in North America, and on Sephora.com.
When you first start learning how to read stock charts, it can be a little intimidating. But you can quickly get up to speed with this new series on Chart Reading For Beginners.
InvestorPlace contributor Brad Moon recently covered the news about Alibaba (NYSE:BABA) filing for a Hong Kong listing that could see it sell up to $20 billion in Alibaba stock. More than that, it gives the ecommerce giant a secondary stock listing in Hong Kong, making it much easier for Chinese investors to own BABA stock.Source: Charles Chan Via FlickrMoon put it this way:"A company of this size choosing to list in Hong King sends the message that Chinese companies don't necessarily need to seek an American IPO to succeed. Making the situation worse, current tensions between China and the U.S. have Chinese companies looking for ways to reduce their exposure to American investment…Other Chinese stocks that are traded in the U.S. could take the same route as BABA stock and also look to Hong Kong for a listing."InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn this scenario, Chinese companies could eventually skip New York altogether, opting to list closer to home, making it much more difficult for U.S. investors to get in on the tech action in that country. * 7 Top-Rated Biotech Stocks to Invest In Today It's a Problem for Investors EverywhereThis isn't a problem for just U.S. investors. Regular Joe's around the world, despite technology and globalization, still have a hard time buying stocks outside their own country. It's a big reason ETFs have taken off. If you can't buy Remgro (OTCMKTS:RMGOF), a South American holding company controlled by the Rupert family, you buy Franklin FTSE South Africa ETF (NYSEARCA:FLZA) instead, the ETF's 11th largest holding. If you're a believer in modern portfolio theory and efficient markets, buying FLZA makes a whole lot of sense. However, if you want to build a global portfolio of companies that are good capital allocators, as Remgro is, it's a much more difficult task. Why can't someone in China go to their computer and buy Alibaba without having to set up accounts with a broker that does business on U.S. stock exchanges? Here in Canada, Lululemon (NASDAQ:LULU) used to be dual-listed in Toronto and NASDAQ. In June 2013, the Vancouver-based apparel company delisted its shares on the Toronto Stock Exchange, opting to go with a sole listing on NASDAQ. For them, it was all about cost. By keeping the listing active, regulatory filings, etc. At the time, the TSX was moving 90,000 shares a day of LULU compared to 1.9 million on NASDAQ."They had very thin volume, considering the expenses of staying in the exchange. And I think they decided that was unwise. It does make sense at the end of the day that they are carefully managing expenses," said Betty Chen, senior vice president at Wedbush Securities Inc. in San Francisco at the time of the delisting. Today, if I want to buy Lululemon, I go to my online brokerage account, paying a commission for the trade and a foreign exchange fee to convert Canadian cash to U.S. cash. However, if I want to go outside Canada or the U.S., my life gets a lot more complicated. Why Does This Happen?With the advent of blockchain technology, I ought to be able to make financial transactions anywhere in the world, bypassing the traditional brokerage system.Yes, I'm sure this raises plenty of red flags about money laundering, etc., but like the photocopier (the 8.5 by 11 piece of paper you lay on the glass seems to be in a different place for every manufacturer) it would be far more efficient to have one system that works well in every part of the world in a seamless manner.The fact that Alibaba has to list Alibaba stock in Hong Kong to appeal to Chinese investors, and the Chinese government to a lesser extent, suggests the global sourcing of capital remains incredibly backward and old school. I get that this secondary listing has politics written all over it given the tensions between the U.S. and China, but to me, this says less about Alibaba stock and more about the failure of globalization.If the world were truly global, I could buy 100 shares of Remgro or a stock listed in Hong Kong or Beijing for $4.99. I can't. Can you? I doubt it. The Bottom Line on Alibaba StockIf you own BABA, I don't think this in and of itself does anything for the stock in the long haul.The $20 billion it will raise from the secondary listing should come in handy as it continues to grow its ecommerce and cloud businesses outside China. That should be good for its stock.However, I wish we didn't have to have this conversation. One listing should be suitable for investors anywhere in the world. Full stop. The fact that it's not is troubling, to say the least. At the time of this writing, Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post The Hong Kong Alibaba Stock Listing Shows Globalization's Failure appeared first on InvestorPlace.