Friday, November 4, 2016

Short Pick Noodles Misses

Last night after the close Noodles (NASDAQ: NDLS) reported a weak 3rd Quarter sending the stock down at the open this morning 5%.

Equities Research Summer Newsletter Short Picks are all down significantly over the 4 months since the picks were made, while the Standard and Poors 500 Index remains flat.

Under Armour Reported 3rd Quarter Financials last week sending stock down $7 for the week.

Next up will be Titan Machinery reporting 3rd Quarter financials either the last week of November or early December. Unlike Noodles and Under Armour, which are just over valued stocks with weakening fundamentals,  Titan Machinery may find themselves out of business soon unless they are able to raise capital. 

Warning on Titan Machinery 

Thursday, November 3, 2016

Under Armour Stock Down 36%

Check out this chart from for UA

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Under Armour (NYSE: UA $30.79) closed yesterday down 36% since closing @ $48.20 (adjusted for split) on November 2,2015. Over the Same 1 year period the S&P500 Index which closed yesterday @ 2097 is down a mere 7 points from November 2,2015 close @ 2097 (is flat.) 

The company filed their 3rd quarter 10Q with the Securities and Exchange Commission yesterday.

Highlights from 10Q 

  • DEBT INCREASES to Over $1 Billion

  • Related Party Transactions : CEO Kevin Plank entity Sagamore Development Holdings sold property for $70.3 million to Under Armour. According this news story the sale price was more than twice what Plank paid for the property in 2014.

  • Allowance for Doubtful Accounts As of 9/30/16 $33.6 million, 12/31/15 $5.9 million 9/30/15 $6.3 million.

  • Under Armour trailing 9 qtrs (aggregate) Negative -($280 Million) operational cashflow. $1 Billion/debt

  •  Company Improved EPS growth due to lower Q3 2016 (32.6%) tax rate vs Q3 2015 (38.8%)
  • Company enjoys higher gross profit margins because they record shipping and handling fees as net revenue but expense the cost as selling and general administrative expenses vs cost of revenue. The $25.7 million in Q3 charged in SG&A helped gross profit increase from 45.7% to 47.5%.
  • Company Recorded more than $65 Million of Net Revenue from shipping and handling fees for the first 9 months of 2016 up from $40 million attributed to net sales in first nine months of 2015

Equities Research Warning on Monday October 24th, the day prior to the 3rd Quarter Earning press release.

Below is the performance of the October Put Options from Monday the 24th to Friday October 28th.

Put Prices on Friday October 28
Put Prices on Monday October 24,2016 (below)