Monday, April 14, 2014

"This was the week that it became apparent to take profits on my GE stock and its comfortable 3% dividend and pour it into an Under Armour (UA) stock that had dropped 25% from its highs in the great swoon"

Dow Jones Industrial Average 16,026.75 (Way down) Week ending 04-11-2014

At the end of this week with all these fine growth stocks beat up and portfolio managers re-balancing their portfolio mixes into the slower growing but less volatile large cap dividend stocks, I decided it was a good time for me to go in the exact opposite direction. 

My GE stock was unscathed in this downturn and it is a stock that I used like a "bond" in my portfolio with its dividend and stability. So I took profits on it and gave up the dividend and put it into a super growth stock which I already knew was going to be splitting 2 for 1 shares and was 25% off of its highs, so it was time to make the move. That stock, which I owned once before, is Under Armour.

Under Armour Inc. Cl. A. (Symbol UA, $101.88) is a company that had $2.33 Billion in sales in 2013. It has a Return on Equity of 17.81% an a PEG ratio of 2.869. UA had 2013 earnings per share of  $1.45 per share. 2014 earnings per share is $1.85 per share and 2015 is $2.32 per share, so a nice earnings growth curve.

 Under Armour operates at a healthy 51.31 percent Gross Margin quarterly. They are financially healthy with a 2.646 Current ratio on the balance sheet.  

The YTD return on UA is 16.7% and the 1 Year return is 81.83%. The 3 year return on the stock is 178%. I will take that any day.

Some other stocks that look like a great buy here after the sell-off are Red Hat Inc. (RHT) and Mastercard (MA).  I also like Disney (DIS)  because of the Captain America success and the upcoming Star Wars series of movies.

I also like all three of the 3-D Printer stocks here, as they have been decimated in this downturn.       (I own all three!) .

They are:

3-D Systems (DDD) , Stratasys Ltd. (SSYS), and Exone (XONE). 

So, think like Anthony J. Drexel and J.P. Morgan and corner the market while everybody else is panicking, (like in 1873), and buy the great growth stock names while the other guys are dumping them.

Enjoy these wonderful Spring days in the US, and keep the faith in growth investing.


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