7/10/24 :: VROCKSTAR :: 
LULU
1% position initiated @ $285
- look at $LULU/
NKE
- same low 20s PE, higher growth, better FCF yield, see no reason why this trend doesn't continue. always always own the smaller marginal gainer when you can, returns will be better
- look at $LULU/
SPXEW (the equal weight S&P) and you'll also notice LT outperformance. despite the whacky paradigm we're in today where 10 stocks are 80% of index returns, sometimes it's harder to identify marginal gainers against tech. so if we treat tech like anything else, LULU remains a better money than most of the stocks in the S&P.
- not a must own, admittedly. we REMAIN in a consumer-poor environment and this hurdle is hard for the mkt to look thru. even rate cuts don't immediately benefit an ailing consumer losing his job, immediately. that said,LULU remains a premium px product (and still best product in it's category) and this consumer likely hurts less.
- I'd like to own more than 1%, but will start using 5-10% down from here increments to feel it out. I'd plan for it to become 2% or if we start going in the sub $250's, perhaps 2.5-3% scaling up as we go lower.
LMK if u see it differently or agree
V
PS - read my priorLULU post for context from 5/20/24. turning this into a "new idea" bc at this pt i'm starting to build a position and want to separate the two thoughts.
LULU1% position initiated @ $285
- look at $LULU/
NKE- same low 20s PE, higher growth, better FCF yield, see no reason why this trend doesn't continue. always always own the smaller marginal gainer when you can, returns will be better
- look at $LULU/
SPXEW (the equal weight S&P) and you'll also notice LT outperformance. despite the whacky paradigm we're in today where 10 stocks are 80% of index returns, sometimes it's harder to identify marginal gainers against tech. so if we treat tech like anything else, LULU remains a better money than most of the stocks in the S&P. - not a must own, admittedly. we REMAIN in a consumer-poor environment and this hurdle is hard for the mkt to look thru. even rate cuts don't immediately benefit an ailing consumer losing his job, immediately. that said,
LULU remains a premium px product (and still best product in it's category) and this consumer likely hurts less.- I'd like to own more than 1%, but will start using 5-10% down from here increments to feel it out. I'd plan for it to become 2% or if we start going in the sub $250's, perhaps 2.5-3% scaling up as we go lower.
LMK if u see it differently or agree
V
PS - read my prior
LULU post for context from 5/20/24. turning this into a "new idea" bc at this pt i'm starting to build a position and want to separate the two thoughts.Note
Have more than doubled my position here pre market to 2.5%. - downgrades on some CC data. what's new. the consumer isn't massively healthy. at the same time this remains the best in class product
- i've started wearing some of these pants (not the yoga lol) for work and i won't ever go back. the materials really are technologically better and that's what i hear from the ladies as well. moat.
- 18x next year EPS on an EPS that *could* see revisions downward not "cheap". FCF still v v strong at 3.5-4% and growing 10%... we're in value territory rn.
- could we see PEG of 1.5x? or even less in this environment on a weak ticker in a rough tide? so call it 14-15x which puts us 15%-20% lower? sure of course.
- do i think we go there? no idea. but we're MUCH closer to a reasonable entry that you can sell your grandma than the converse.
- does this take some time to pay out like my initial views (when we were 320s and avoiding the stock for a time lie now)... yeah i still think the same thing and it's somewhat played out.
- so this isn't an obvious swing trade, but becoming more of a slow building core here. one of the best larger-cap discretionary names i can find. still lots to do in athletics (college), everyday wear (like what i have) and int'l.
- i'd guess lows would be in the 230-245 region. i'd GUESS. and i'm willing to entertain that drawdown on a multi-year compounder in order to start growing my exposure. it's a risk management equation not trying to time the absolute bottoms and tops. i try to do that too with stuff that's smaller and more volatile and i won't hold. but for names like this it's pure risk mgmt game and sizing properly at the bottoms (like we are forming now) and scaling out near the tops.
have a good week.
V
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.