Final Trade Detail

Lululemon

Investors who followed this trade Generated a

0.04% Return

Open Date

9/15/2018

Close Date

10/5/2018

Hold Time

15

Buy Price

153.71

Close Price

153.84

%Gain/Loss

0.04%

Original Recommendation

Lululemon

Lululemon (LULU)

our opinion

buy

current price

$153.71

target price

$175

market cap

$20B

div yield

0%

  • Lululemon is one of the highlights in the retail sector. As other companies sales are declining, Lululemon's sales continue to increase at a solid pace.
  • Lululemon is a perfect momentum stock. It's up nearly 100% YTD. And is currently trading in an ideal bull flag pattern. We expect the stock to break out to the upside.
  • Lululemon is a leading indicator on the upper-middle class consumer. They are showing the American consumer is spending up on quality. We expect continued growth into the holiday season.

trade details

The American consumer is alive and well.

There’s one company taking advantage.

They’re absolutely crushing the apparel game. And they should continue to crush it over the next couple quarters.

We’re talking about Lululemon (LULU).

You see, men are finally realizing they should pay for quality when it comes to workout clothes. Women will want to show off their bodies till the end of time.

Lulu’s products aren’t cheap. They’re definitely for the upper-middle class. And they rarely offer discounts. If at all.

That isn’t hurting revenue though. Or the share price.

Revenue is up 25% year over year (in the second quarter). And comparable store sales are up 10%.

The stock is up nearly 100% year-to-date.

We see no slowdown heading into holiday season. Consumers are flush with cash. They’ll buy more of Lulu’s clothing for themselves. Or for holiday gifts. Lulu will be a major beneficiary.

This is a more of a short term, momentum trade over a long-term investment. Lulu is consolidating in a “bull flag” pattern.


If it breaks above this wedge, it’s off to the races. But a break to the downside and it will pull back (to the $135 range).

We’d say buy ½ a position now as to not miss the upside. And wait to see which way the stock moves.