Is Momentum Shifting On Lululemon
For more than three years, Athletica (LULU) has been among the favorite stocks of the momentum crowd, rushing to buy the stock in every dip.
Following a disappointing guidance from the company this morning, things cheap timberland boots may be changing, as the momentum begins to shift. 's stock is trading below its 100 day moving average, but still above its 200 day moving average. And there are good fundamental reasons supporting this shift:
1. Imitation. As is the case with other momentum cheap timberland boots for men stocks like OpenTable (OPEN) and Netflix (NFLX), doesn't have a sustainable competitive advantage, as it has no barriers to entry to keep the competition out. Already Gap (GPS), Nike (NKE) and Nordstrom have developed their own yoga athletic gear, and compete head to head pink timberland boots with . Nordstrom (JWN), for instance, is selling similar gear 30 percent below that of , while "Nike and Gap also are following 's practice of tapping into yoga's spiritual ethos, an effort that makes customers feel that they're part of the community."
2. The casque beats pro cooling off effect. 's sales can, in part, be attributed to a craze that eventually fades away, as people get tired of it, or as another craze catches up with them. That's at least the experience from previous crazes such as LA Gear shoes and Barbie dolls.
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Quarterly Revenue Growth2
3. Saturation. Not every lady on earth is going to fall for the yoga craze and shop for new gear every other week. This means that, even in the absence of any competition, sales will taper off casque docteur dre as the market approaches saturation.
4. A weak economy. Money consumers spend on yoga or any other leisure activity is discretionary. This means that a weaker economy will make a dent in yoga gear sales, especially for the high end of the market where caters. Tiffany casque beats wireless reported disappointed sales recently.
The bottom line: Economic fundamentals are catching up with 's stock, which make it ripe for a correction. Conservative investors should avoid it. Aggressive investors may want to build short positions, as I did, but ecouteur sans fil they have to keep an eye on a number developments that may help the company's momentum resume. First, an improvement in the US and the world economy. Second, the introduction of new products. Third, a reversal in insider transactions, which have been on the sell side.