Under Armour Cash Flow Should Have Investors Running Away

"Stocklemon believes that StockDiagnostics.com is one of the best stock advisory sites on the web.  It judges companies based on a proprietary OPS rating and covers both long and short positions."---------September 22,2003 Andrew Left founder of Citron Research

Stockdiagnostics.com in Barron's

about Equities Research @stockpicker908 tweeter handle

(my former twitter handle was @GFNNStock)

"From time to time I'm asked about analysts, diggers whose work I really respect, who do things well. Tom Renna, @GFNNstock, is a must follow— Roddy Boyd (@BoydRoddy) September 7, 2013

Feb. 5,2015 -- Under Armour CEO Kevin Plank talks about why he's buying the MyFitnessPal and Endomondo apps for a total of about $560 million.
         Equities Research Looks at Under Armour

*Negative Cash Flow (~goodwill $472 million)

*Class Action Lawsuit Settlement

*CEO New Stock Trading Plan

*Series Class C Shares
CFO/COO Departure
*Morgan Stanley Downgrade $62 (1/30/16) 

On Thursday morning Under Armour (NYSE: UA) reported FY2015 earnings sending the stock $20 higher from $65.58 to close the week @ $85.43. Up 30% in two days.

Record Sales and earnings were super impressive, but a close look at the cash flow statement raises a RED FLAG.

note: As of Sunday (1/31/16) Under Armour has not yet filed their 10K annual report with the Securities and Exchange Commission as of this morning so we are not able to dig deep into footnotes and other exhibits at this time.

A look at the 8K filed on Thursday can be found here. 

Before I jump to the FY2015 Negative $44 Million Operational Cash Flow, lets look at 2 recent SEC filings that should make investors wonder how many total shares are really outstanding when including Class A, Class  B and Class C shares.

Shares Fall 8.5% in 1 day
On November 12,2015 Under Armour traded at $94.16 with volume of 3 million shares.
On November 13,2015 Under Armour traded at $86.08 with volume of 7 million shares.
What happened?
At 10am November 12th CEO Kevin Plank filed this SC 13D/A with the Securities and Exchange Commission.

"(Kevin Plank) entered into a pre-arranged stock trading plan to sell shares of the Issuer’s Class B Common Stock and, if and when issued, the Issuer’s Class C Common Stock."

"If the Reporting Person completes all the planned sales under this trading plan, he would beneficially own 35,700,000 shares of Class B Common Stock and Class A Common Stock, representing approximately 16.6% of the total shares of Class A and Class B Common Stock outstanding as of September 30, 2015 and representing approximately 66.5% of the combined voting power of the Issuer outstanding as of September 30, 2015". 

• CEO Kevin Plank sold 450,000 shares November 23rd. Sold at an ave price of $91.99,( $41,395,500.00) 

Consolidated Class Action Lawsuit
August 14,2015 this DEFA 14A filing with the Securities and Exchange Commission was filed.

"Under Armour ..is currently involved in a consolidated class action lawsuit brought against the Company and the members of the Company’s Board of Directors on behalf of purported stockholders of the Company in connection with the creation by the Company of a new class of common stock, referred to as the Class C common stock, par value $0.0003 1/3 per share"

LAWSUIT SETTLEMENT OCTOBER 2015 
Shares declined from an all time high above $100 in October to a 52 week low in January 2016 

October 7,2015 8K Settlement

October 13,2015 8K COO/CFO Departure



Are You Still Long?
Operational Cash Flow for FY2015 was NEGATIVE $44 Million!
vs
Operational Cash Flow FY2014 of Positive $219 Million.

Year over Year Operational Cash Flow declined by $263 Million

Operational Cash Flow
FY2010: $50 million
FY2011: $15 million
Fy2012: $200million
FY2013: $120 million
FY2014: $219 million
FY2015: NEGATIVE ($44 Million)

Cash Flow used in 2 Acquisitions during 2015.
$475 million for MyPalFitness.com
$85 million for Endomondo
$560 Million total cost, 
$472 million GOODWILL 

Under Armour 
Stock Price has had a History of Following Cash Flow.
November 18,2005 IPO
 Under Writer: Goldman Sachs. 9.5 million shares @ $13 (adj for 2 (2 for 1)splits $3.25).

Shares went from $13 to $68 on August 21,2007.

Enter Equities Research

Equities Research went bearish (A-E) on UA at $68 to $15 before going Bullish.(F)

A Short $68  (70% profit in 15 months)
Hottest Stock with Weakest Cash FLow August 21,2007 $68
 

B.Short $48  (58% profit in 1 year)
Large Caps May Not Always Be Less Speculative

C. Short $ 45 (55% profit in 9 months)

Love Your Valentine, Not Your Stocks

D. Short $38   (47% profit in 3 months)

Beware:  Standard & Poors Adds A Poor Quality Stock to Index

E. Short $33   (40% profit in 3 months)

Easy Money : SHORT UNDER ARMOUR

F. long $15 GFNN news story upgrade

Tuesday, July 24, 2012

Renna Warning on Under Armour Mentioned on CNBC-TV (Herb Greenberg)

Monday, July 30, 2012

Under Armour's Special Effects

by Michael Markowski, Director of Research @ Stockdiagnostics
July 30,2012

December 2012: Stockdiagnostics the Utility
Finding Stocks that Fall 30% to 99%

29 GFNN STOCKDIAGNOSTICS Portfolios created by Equities Research founder , Tom Renna

CROWDFUNDING: PREDICTED TO BECOME THE LARGEST DIGITAL INDUSTRY IN THE WORLD

Opportunist Magazine : Michael Markowski 

"Predicted to Become the Largest Digital Industry in the World"

• Michael Markowski: The decade ending 2020 will be recorded by historians as the best ever for investors to have created immense and dynasty wealth. I am projecting that there will be more than 1,000 companies that multiply by at least 100 times in price over the next five years. The Dynasty Wealth website is loaded with short educational videos. I would highly recommend to all of your readers that they take the time to watch them. The next five years will be the most exciting and lucrative for investing. Prior to this period the only way that individuals had a chance to create dynasty wealth was to have been lucky enough to have lived next door to Bill Gates or Steve Jobs and to have invested into their companies in the early days.

Markowski August Call Simply Amazing!

Thursday, January 26, 2012

Private Shares on Secondary Market: FACEBOOK

TITAN MACHINERY Down 40% since April 14th 52 Week High

The above chart demonstrates how Equities Research llc  SEEKS ALPHA!
 (chart source: www.bigcharts.com)



After Titan Machinery reported disappointing  Fiscal Year 2014 annual financials on April 10,2014, shares went on a three day tear and traded up from $16 to $20.40.
In less than 5 months since hitting the 52 week high of $20.40 on April 14,2014, shares are now down 40%, closing yesterday @ $12.44. The S&P500 index is up 9% over the same period. (1830 to 1997).

Management of Titan can blame price of corn, the weak construction & agricultural economy,  poor farming, the unrest with their footprint in the UKRAINE, but I blame The company's poor financial condition on GREED AND RELATED PARTY TRANSACTIONS


Equities Research remains bearish Titan heading into the company's  2nd  quarter earnings release scheduled to be reported pre-market next Tuesday.

• Top Technical Analyst Greg Harmon looks at Titan Machinery

•  On June Q1 conference call Chairman gave guidance: "expect our Ag same-store sales to be negative 10% to 15%".

• Investment Banking firm William Blair has Titan rated a Sell (under perform). William Blair covers 98 stocks and Titan is its only SELL rating.

• Titan Machinery's $150 million Convertible Bond traded at an all time last week @ $77.50 yielding 9.78%.

• Based on Titan Machinery's Historical Guidance, future guidance should not be trusted.  

•  History of Negative Operational Cash Flow 

•  10K FootNote: Wells Fargo Tightens Debt Agreement (again) on Titan Machinery

• A Review of Securities & Exchange Commissions Comments regarding Titan Machinery Disclosure

• YEAR over Year Earnings are down (-79%) . 

• FY 2015 Q1 Results: Loss ($0.20) vs. Loss ($0.02 in FY2013 Q1

• Trailing Twelve Months ending April 30,2014 Net Income : $5.07 million. At current $250 million market capitalization, shares are trading at a Price to Earnings Multiple of 60.

• Other Q1 2015 CC Highlights:
• Agriculture Adjusted Pre-Tax Income Declined 50% in FY2015 Q1 vs FY2014Q
•  
•  "Used Equipment Prices Under Pressure due to Higher Industry Levels of Used Equipment"

•  Q1 equipment margins declines. Gross profit margin was 16.3% in the Q1 fiscal 2015, compared to 16.7% in the first quarterQ1 last yr

• inventory level was $1.12 bil as of April 30, 2014, compared to $1.08 billion as of January 31, 2014.Floorplan interest exp $4.6 mil

•   FY15 Q1 Operational Cash FLow : (Negative $54 mil) vs (Neg $6 mil) in FY14 Q1. operational cash flow per share NEG ($2.44) per share

my former twitter handle was @GFNNSTOCK

This guy makes a serious case that this company is, umm, furry. (@gfnnstock)newsgrade.blogspot.com/2013/04/titan-…
— Roddy Boyd (@BoydRoddy) April 28, 2013

 

I've got to hand it to $GFFNStock (Tom Renna): He's been warning on $TITN for quite awhile http://t.co/Fso3e4laAg Also not a fan of $SSYS
— Herb Greenberg (@herbgreenberg) May 24, 2013

Posts of Titan Machinery's Decline from $30 to $14

Friday, August 24, 2012

Weakening Cash Flow at DICK'S & TITAN 

Monday, September 10, 2012

Titan Reports, Misses, Cuts, ....Drops

Tuesday, April 9, 2013

Titan Machinery Reports in Morning

Thursday, April 25, 2013

Most OverPriced Stock Titan Machinery Files Proxy Statement

Thursday, May 16, 2013

March Newsletter Performance 9 out 10 Picks " In The Money"

Thursday, May 16, 2013

13 out 15 February Newsletter Picks "In the Money"


Tuesday, June 4, 2013
TITAN STOCKHOLDERS Did NOT APPROVE PROPOSAL 3


Monday, August 12, 2013

Titan Machinery Warning


Wednesday, September 4, 2013
Don't Trust Titan Machinery's Guidance


Thursday, September 5, 2013

Titan Machinery EPS Falls 73%

Wednesday, December 4, 2013

Greg Harmon Technical Chart of Titan Machinery

Friday, December 6, 2013

Equities Research Gets Recognized For Titan Machinery Warning
Wednesday, December 11, 2013

Reseller Can't Compete with Manufacturers


Tuesday, March 11, 2014

Top Short Pick: TITAN MACHINERY


Friday, April 4, 2014

Titan Machinery Convertible Bond Nears All Time Low


Monday, April 7, 2014

A Review of Securities & Exchange Commissions Comments regarding Titan Machinery Disclosure


Friday, April 11, 2014

Warning: Don't Buy Titan Machinery Guidance


Sunday, April 13, 2014

10K FootNote: Wells Fargo Tightens Debt Agreement (again) on Titan Machinery


Thursday, June 5, 2014

Titan Machinery Reports Q1 Loss of ($0.20)


Thursday, June 12, 2014

Don't Assume Titan Machinery Will Be Profitable because Management Says So


Thursday, June 19, 2014

New Credit Agreement Requirements Makes Titan Highly Speculative



archived statistics with Stockdiagnostics Charts of Titan Machinery

http://www.equitiesresearch.com/news.asp?Title=titn

Stockdiagnostics Examines Titan's Q3 Financials

Stockdiagnostics' chief market strategist, Michael Markowski, published the following report Knobias this morning @ 9:56am.

Probability of 2014 Bankruptcy for Titan Increases After it Files Quarterly Report

By Michael Markowski

The probability of Titan Machinery (NASDAQ:TITN:$15.00) having to file for bankruptcy by the end of or sooner than the end of 2014 has increased significantly based on its 3^rd quarter 10/31/13 financials that it filed yesterday.  In a report “Tractor Pull for Titan Machinery May be Over by Tomorrow” which was published on December 4, 2013, I had predicted that Titan would file for bankruptcy by the end of 2014.  

Titan’s Income Statement, Balance Sheet and Cash Flow Statement data deteriorated over the 90 day period.  Titan’s revenue for its 3^rd quarter increased by less than 1% from $582.1 million in the year ago quarter to $588.0 million.  It also reported that its inventory increased by 10% to $1.2 billion from its quarter ended July 31, 2013.  Finally, Titan operating cash flow for the quarter was a negative $59.8 million.  Titan has generated negative quarterly operating cash flow in nine of its last 10 quarters.

Titan is following a similar script that I have seen played out by numerous companies that StockDiagnostics.com has diagnosed as having “The EPS Syndrome”.  Notable companies who were previously diagnosed with this negative operating cash flow anomaly include Bear Stearns, Merrill Lynch and Lehman Brothers.  Here is the typical script:   

1.                  Company utilizes archaic SEC accrual accounting standards to report growing cashless earnings.

  

2.                  Wall Street analysts recommend shares based on earnings growth.

3.                  Wall Street investment bankers who are affiliated with analysts raise capital for company to generate commissions.

4.                  Commercial banks and suppliers provide loans and credit lines based on the increased equity.

5.                  After the company maximizes its ability to raise additional debt and equity capital revenue growth flattens.

6.                  Company sells inventory at losses and creates declining revenue and EPS losses.

7.                  Company loses option to sell or issue equity to raise capital due to both fundamentals and share price momentum turning negative.  Also loses ability to increase borrowings.

8.                  Company’s fundamentals and share price continue in downward spiral as it liquidates inventory at declining prices to raise cash.

9.                  Company has no choice but to file for bankruptcy since it has debt and can not raise cash.

Titan was first diagnosed as having The EPS Syndrome on September 8, 2011 at a price of $26.41.  Its among several institutionally held public companies who have Wall Street analyst Buy Ratings that StockDiagnostics.com has diagnosed with extreme or severe cases of The EPS Syndrome or cashless earnings. 

There have been 93 companies diagnosed with The EPS Syndrome during 2013 and more than 2,500 since 2002.  The share prices of approximately 70% of the companies diagnosed are below their diagnosis price.  Share prices have fallen by at least 50% for half of those companies that have been diagnosed as having the EPS Syndrome.  A four minute video that explains The EPS Syndrome is available.

Equities Research Gets Recognized For Titan Machinery Warning

Yesterday Titan Machinery (NASDAQ: TITN) reported 3rd quarter financials for the period ending October 31,2013.
Titan traded over 3 million shares and closed below $15 for the first time since August 2010 and was a top ten loser on NASDAQ.

Congrats to @GFNNstock for a great call on $TITN.Here’s what he wrote in April http://t.co/NMAM2lzW9c

— Herb Greenberg (@herbgreenberg) December 5, 2013

In a market that hasn't made shorting easy @GFNNstock showed the poor fundamentals of $TITN long ago with much alpha - I'm very appreciative

— Voltaire (@PhilipEtienne) December 5, 2013

@GFNNstock great coverage

— john rock (@johnrock4) December 4, 2013

Bloomberg TV looks at Equity Crowdfunding

This morning on Bloomberg Television Market Surveillance, Tom Keene interviewed Indiegogo co-founder Slava Rubin to discuss how Equity Crowdfunding will be the New Economy. Rubin suggests that Crowdfunding will be disruptive to Venture Capital because "the gatekeeper will no longer control who gets money."





Equities Research Archives Discussing Crowdfunding

• GFNN Founder Michael Markowski Interview (Crowdfunding)

• NEXT EXCITEMENT: CROWDFUNDING

• CrowdSourcing (Merrill Lynch Research)

• New Bill is a Game Changer

 

 

Stockdiagnostic Upgrades Hit All Time Highs: DSW, TJX, CYBX

EquitiesResearch.com morning post
(charts are at date of upgrade and downgrade)


11/20/2013

Apogee Enterprises (NASDAQ:APOG) closed yesterday @$33.28. Stockdiagnostics upgraded APOG @ $9.48 (dividend adjusted) on October 10,2011 after the company reported 2nd quarter financials for the period ending August 31,2011. In 2 years since the upgrade shares are up 251%.
<click to APOG Stockdiagnostics OPS chart<

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11/20/2013

AngloGold Ashanti (NYSE: AU) closed yesterday @ $12.73.Stockdiagnostics downgraded AU @ $46.88 on February 18,2011 after the company reported 4th quarter financials for the period ending December 31,2010. Since the downgrade 35 months ago shares are down 69%.
<click to AU Stockdiagnostics OPS chart

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11/20/2013

Barrett Business Services, Inc. (NASDAQ: BBSI) closed yesterday @ $85.51. Stockdiagnsotics upgraded BBSI @ $12.43 (dividend adjusted) on August 19,2010 after the company reported 2nd quarter financials for the period ending June 30,2010. Since the upgrade 39 months ago have gained 588%.
<click to BBSI Stockdiagnostics OPS chart 5 year<click to BBSI Stockdiagnostics OPS chart
<click to BBSI GFNN news story

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11/20/2013

Brown Shoe Company, Inc. (NYSE: BWS) traded at a 52 week high yesterday before closing @ $25.12. Stockdiagnostics upgrade BWS @ $6.96 (dividend adjusted) on September 27,2011 after the company reported FY2012 2ns quarter financials for the period ending July 31,2011. Since the upgrade 26 months ago shares have gained 261%.
<click to BWS Stockdiagnostics OPS chart 5 yr<click to BWS Stockdiagnostics OPS chart

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11/20/2013

CalAmp Corporation (NASDAQ: CAMP) closed the week @ $8.36. Stockdiagnostics upgraded CAMP @ $3.18 on May 16,2011 after the company reported FY2011 4th quarter financials for the period ending February 28,2011. Shares are up 647% in 30 months.
<click to CAMP Stockdiagnostics OPS chart 4q
<click to CAMP Stockdiangostics FCF chart 20q
<click to CAMP Stockdiagnostics FCF chart

<click to CAMP Stockdiagnostics OPS chart

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11/20/2013

Cardtronics, Inc. (NASDAQ: CATM) closed Friday @ $25.27. Stockdiagnostics upgraded CATM @ $3.02 on May 12,2009 after the company reported 1st quarter financials for the period ending March 31,2009. Since the upgrade 54 months ago shares have gained 1286%.
<click to CATM Stockdiagnostics OPS 20 quarter chart
<click to CATM Stockdiagnostics OPS 5 year chart
<click to CATM Stockdiagnostics FCF 20 quarter chart
<click to CATM Stockdiagnostics FCF 5 year chart

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11/20/2013

Cyberonics, Inc. (NASDAQ: CYBX) traded yesterday at an all time high before closing  @ $61.92. Stockdiagnostics upgraded CYBX @ $13.91 on November 26,2008 after the company reported FY2009 2nd quarter financials for the period ending October 31,2008.  In 5 years since the upgrade shares have appreciated 345%.

<<click to CYBX Stockdiagnostics FCF chart

<<click to CYBX Stockdiagnostics OPS chart
<<click to CYBX GFNN news story<

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11/20/2013

Denny's Corporation (NASDAQ: DENN) traded at a 52 week high yesterday before closing @ $6.97. Stockdiagnostics upgraded DENN @ $3.81 on August 15,2011 after the company reported 2ndt quarter financials for the period ending June 30,2011. Since the upgrade 27 months ago shares have gained 82%.
<click to DENN Stockdiagnsotics OPS chart
<click to DENN Stockdiagnsotics FCF chart

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11/20/2013

Discovery Communications, Inc. (NASDAQ: DISCA) closed yesterday @ $85.23. Stockdiagnostics upgraded DISCA @ $34.75 on August 8,2011 after the company reported 2nd quarter financials for the period ending June 30,2011. Shares are up 145% in 27 months since the upgrade.

<click to DISCA Stockdiagnostics OPS chart

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11/20/2013

DSW Inc. (NYSE: DSW) traded yesterday at an all time high (8 year) before closing @ $45.75. Stockdiagnostics upgraded DSW @ $21.47 (split & dividend adjusted) on September 14,2011 after the company reported 2nd quarter financials for the period ending July 31,2011. Since the upgrade 26 months ago shares are up 113%. (41.4% annualized total return)
<click to DSW Stockdiagnostics OPS chart
<click to DSW Stockdiagnostics FCF chart
<click to DSW Stockdiagnostics FCF chart 5 year

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11/20/2013

Eagle Materials, Inc. (NYSE: EXP) closed yesterday @ $76.29. Stockdiagnostics upgraded EXP @ $28.02 (dividend adjusted) on May 31,2011 after the company reported FY2011 4th quarter financials for the period ending March 31,2011. Since the upgrade 30 months ago shares are up 172%.
<click to EXP Stockdiagnostics OPS chart
<click to EXP Stockdiagnostics OPS chart 5 year
<click EXP Stockdiagnostics OPS chart 4q

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11/20/2013

Kid Brands, Inc. (NYSE: KID) closed yesterday @ $1.10. Stockdiagnostics downgraded KID @ $8.98 on November 15,2010 after the company reported 3rd quarter financials for the period ending September 30,2010.
Since the downgrade 3 years ago shares have declined 88%.
<click to KID Stockdiagnostics OPS chart

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11/20/2013

Kansas City Southern (NYSE: KSU) closed yesterday @ $121.52. Stockdiagnostics upgraded KSU @ $36.66 (dividend adjusted) on August 2, 2010 after the company reported 2nd quarter financials for the period ending June 30,2010. Shares are up 231% since the upgrade 3.3 years ago. (43.8% annual return)
<click to KSU Stockdiagnostics OPS chart
<click to KSU GFNN news story

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11/20/2013

MasterCard Inc. (NYSE:MA) closed yesterday @ $746.95.  Stockdiagnostics upgraded MA on February 24,2010 @$219.49 (dividend adjusted) after the company reported 4th quarter 2009 financials for the period ending December 31,2009. Since the upgrade 45 months ago shares have gained 240%.
<click to MA Stockdiagnostics FCF chart
<click to MA Stockdiagnostics FCF chart 5 year

<click to MA Stockdiagnostics OPS chart

<click to MA GFNN news story

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11/20/2013

McKesson Corporation (NYSE: MCK) closed yesterday @ $159.21. Stockdiagnostics upgraded MCK @ $43.04 (dividend adjusted) on February 2,2009 after the company reported FY2009 3rd quarter financials for the period ending December 31,2008. In 5 years since the upgrade shares are up 270%. (31% total annualized return)
<click to MCK Stockdiagnostics OPS chart 5 year

click to MCK Stockdiagnostics OPS chart

click to MCK GFNN news story

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11/20/2013

Pharmacyclics Inc. (NASDAQ: PCYC) closed yesterday before closing @ $124.43. Stockdiagnostics upgraded PCYC @ $23.23 on February 13,2012 after the company  reported FY2012 2nd quarter financials for the period ending December 31,2011. Since the upgrade 21 months ago shares have appreciated 435%
<click to PCYC Stockdiagnostics OPS chart
<click to PCYC Stockdiagnostics OPS 5 year chart

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11/20/2013

Salem Communications Corp. (NASDAQ: SALM) closed yesterday @ $8.49. Stockdiagnostics upgraded SALM @ $2.74 (dividend adjusted) on August 16,2011 after the company reported 2nd quarter financials for the period ending June 31,2011. In 27 months since upgrade, shares have appreciated 209%.
<click to SALM Stockdiagnostics OPS chart 5 year<click to SALM Stockdiagnostics OPS chart

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11/20/2013

Susser Holdings Corporation (NASDAQ:SUSS) traded yesterday at an all time (7 year) high before closing @ $63.53. Stockdiagnostics upgraded SUSS @ $13.64 on March 24,2011 after the company reported financials for the 2010 4th quarter ending December 31,2010. Since the upgrade 32 months ago shares have gained 366%.
<click to SUSS Stockdiagnostics FCF chart
<click to SUSS Stockdiagnostics OPS chart

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11/20/2013

The TJX Companies, Inc(NYSE: TJX) traded at an all time (25 year) high yesterday before closing @ $63.12. Stockdiagnostics upgraded TJX to a "1" ranking on September 17,2001 when the shares were at $6.67 (adjusted for splits and dividends). In 12 years since the upgrade, shares have appreciated 846%.
<click to TJX Stockdiagnostics FCF chartclick to TJX GFNN news story
<click to TJX Stockdiagnosics OPS Chart

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11/20/2013

Visa, Inc (NYSE:V) closed  yesterday @ $197.39.Stockdiagnostics upgraded Visa @ $72.21 (dividend adjusted) on February 7,2011 after the company reported 2011 1st quarter financials for the period ending December 31,2010. In 33 months since the upgrade, shares have gained 173%<click to Visa Stockdiagnostics OPS chart

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