Stick with UA Stock
Under Armour Inc (NYSE:UA) stock has not performed as well as the technology it sells lately. It rose last week to just less than $40.00 per share, but UA stock is still trading some 17% lower than its more than $46.00 peak valuation achieved in April. Has Under Armour stock outworn its welcome already?
Not at all. In fact, investors have realized that wearable technology, UA’s specialty, has huge potential.
The wearable technology sector has barely scratched the proverbial surface and Under Armour is present and ready to take advantage of the imminent demand surge. UA is a stock worth considering, especially at its current valuation and before it heads back to its highs.
Indeed, while the chart trend does indicate that UA stock will recover, the optimism has solid backing from the factory floor. The company is about to launch a hot new item in wearable tech.
Under Armour is moving the apparel industry into the age of The Jetsons or Star Trek. UA is literally working on the clothing of the future—connected apparel.
In stock terms, Under Armour might be compared to Apple Inc. (NASDAQ:AAPL) before it launched the “iPhone.” What Apple did to communications, Under Armour could do to clothes from a technology and market perspective.
This is why Under Armour is such an exciting stock. The fact that few investors have yet to grasp the full extent of its potential makes it all the better. Imagine biotech shirts that can automatically adjust temperature to make you feel more comfortable. Should you wish to match that same shirt to another pair of slacks, imagine simply changing its color by tapping a button. (Source: “3 Predictions for the Future of Athletic Wear, According to Under Armour,” Tech Insider, June 29, 2016.)
Under Armour has the keys to combining the apparel and tech industries into a hybrid space. At this time, there are few companies with that kind of potential for investors to consider. UA stock is, if nothing else, a fascinating prospect. Simply put, the future of clothing does not rest with the traditional apparel brands—it has now shifted to the more technology-oriented companies, starting with Under Armour.
Indeed, when most people think of fashion, they think of luxury brands like Hermes, Ralph Lauren, or any number of names you might see at your local Saks Fifth Avenue store. Yet, there’s a new and rapidly growing line of products that bridge the space between luxury clothing and athletic wear. This is going to revolutionize the apparel industry and change the way people think about what they wear.
This new concept, known as “wearable technology” is still in its early phase, but there are some emerging brands that are already delivering results to investors. Under Armour is one of those brands.
Wearable technology, as a concept, is all about offering a solution to those who want to enjoy a complete “bionetwork” of sorts. In other words, they want to combine their regular clothes and accessories with comfort, style, and tech features like the ability to monitor their heart rate, count their steps, and track their caloric intake. Moreover, they want to manage all of this using a specialized app on their smartphones.
Under Armour has just this sort of product—the “UA Record.” As you can well imagine the devices help you track your daily activity, sports, and weight—all with an eye to design.
Wearable technology in the overall context of the apparel sector has a distinct advantage over the more traditional fashion brands. It’s a reversal of fashion itself. Whereas the big designers like Calvin Klein or Armani were all the rage starting in the 1980s, revolutionizing the retail industry, wearable tech companies like Under Armour have the power now. The high-end consumer is no longer satisfied with a mere cashmere coat from a top luxury brand. Now, that coat must have the ability to heat up at the touch of a button or have an app that allows the wearer to monitor their heart rate or deliver digital business cards. (Source: “Will Wearable Tech Ever Be Stylish?,” Fashion Beans, July 7, 2016.) While the luxury brands have the expertise in choosing the right fabric, stitching, and cut, the tech experts have the know-how to deliver the apps and technology to make the experience “seamless.”
Some of the apps might be superfluous or downright silly in an item of clothing like a t-shirt. However, would you not consider buying a special t-shirt that could warn you when it’s time to give it wash if it cost the same or little more than a regular t-shirt? You get the point. (Source: Ibid.)
The technology is not quite there yet, but Under Armour is sure to be one of the pioneers, given its record, brand recognition, and consumer demand.
Additionally, Under Armour has recently expanded its market reach, having launched its range of smart fitness products for the first time in Europe. Europeans now also have access to UA’s “HealthBox” accessories, developed in partnership with HTC, which include the company’s fitness band, the “UA Scale,” “UA Heart Rate,” and a membership to the “MyFitnessPal Premium” app.
Sports apparel is already generating billions and Under Armour is one of the industry’s leaders. Now, Under Armour stock has decidedly bullish prospects considering the implications of “smart” clothing. Savvy investors could consider UA stock now before the company revolutionizes the clothing industry.