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For Under Armour, The Bull Vs. Bear Debate Continues

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For Under Armour, The Bull Vs. Bear Debate Continues
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Under Armour Inc (NYSE: UAA)'s stock is not only on track to end 2017 notably in the red, but on pace for its worst trading year ever.

The Expert

Chad Morganlander, a portfolio manager with Washington Crossing Advisors, and Boris Schlossberg, managing director of FX strategy at BK Asset Management

The Thesis

Under Armour's stock is ranked as the worst performer within the entire S&P 500 index, but investors may want to ignore 2017's performance and focus on a three- to five-year outlook, Morganlander said during a recent CNBC "Trading Nation" segment. Perhaps most important to consider, the company boasts minimal debt coupled with "neutral" fundamentals and a low stock valuation of 1 times enterprise to sales

"They are earning money," he said. "You can get a better-than-market return with less volatility."

Taking the other side of the trade, Schlossberg disagrees and thinks Under Armour is nothing but a "classic falling knife, palm wide open trap" as it continues to face "very, very stiff" competition from existing rivals. However, the entrance of Amazon.com, Inc. (NASDAQ: AMZN) into the sports apparel space could "destroy them from the sidelines."

Meanwhile, the departure of the company's footwear chief Ryan Drew last week marks the fifth high level executive departure since October and the company is struggling to stabilize its operations and brand.

Price Action

Shares of Under Armour have lost 56 percent since the start of 2017 and were trading lower by nearly 2 percent Monday.

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Posted-In: Apparel Boris Schlossberg Chard Morganlander sports apparel Trading NationAnalyst Color CNBC Media Best of Benzinga

 

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