Watsa Increases Stake in Under Armour Shares
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: Fool
- Share Acquisition Overview: Prem Watsa purchased 1,178,344 shares of Under Armour across three open-market transactions for a total of $5.9 million, demonstrating ongoing confidence in the company despite having zero direct holdings post-transaction.
- Indirect Holdings Change: Following the transaction, Watsa's indirect holdings increased to 44,179,216 shares, representing 2.74% of total indirect holdings, indicating a strategy of incremental position-building rather than a significant repositioning.
- Market Performance Analysis: Under Armour has a market capitalization of $2.5 billion and a 9.4% decline in stock price over the past year, as the company strives to rebuild margins and brand relevance, facing challenges in execution while also presenting opportunities for recovery.
- Investor Signal: Watsa's purchase is seen as a signal of deep-value investing, suggesting optimism about Under Armour's future recovery, particularly as the company focuses on improving sales quality through SKU reduction and external leadership integration.
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Analyst Views on UA
About UA
Under Armour, Inc. is an inventor, marketer and distributor of branded athletic performance apparel, footwear and accessories for men, women and youth. Its primary business operates in four geographic segments: North America, comprising the United States and Canada, Europe, the Middle East and Africa (EMEA), Asia-Pacific, and Latin America. Its apparel comes in three primary fit types: compression (tight fit), fitted (athletic fit) and loose (relaxed fit). Its footwear includes products for running, training, basketball, cleated sports, recovery and outdoor applications, as well as casual use. Its accessories primarily include athletic performance gloves, bags, headwear and socks. It sells its apparel, footwear and accessories in North America through wholesale and direct-to-consumer channels. It sells its apparel, footwear and accessories in EMEA primarily through wholesale customers and independent distributors, along with e-commerce Websites and brand and factory house stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Watsa Increases Stake in Under Armour Shares
- Share Acquisition Overview: Prem Watsa purchased 1,178,344 shares of Under Armour across three open-market transactions for a total of $5.9 million, demonstrating ongoing confidence in the company despite having zero direct holdings post-transaction.
- Indirect Holdings Change: Following the transaction, Watsa's indirect holdings increased to 44,179,216 shares, representing 2.74% of total indirect holdings, indicating a strategy of incremental position-building rather than a significant repositioning.
- Market Performance Analysis: Under Armour has a market capitalization of $2.5 billion and a 9.4% decline in stock price over the past year, as the company strives to rebuild margins and brand relevance, facing challenges in execution while also presenting opportunities for recovery.
- Investor Signal: Watsa's purchase is seen as a signal of deep-value investing, suggesting optimism about Under Armour's future recovery, particularly as the company focuses on improving sales quality through SKU reduction and external leadership integration.
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Fairfax Financial Acquires Additional Shares in Under Armour
- Share Acquisition: Fairfax Financial indirectly purchased 1,178,344 shares of Under Armour, representing 2.74% of its total indirect holdings, indicating confidence in the company despite its stock nearing five-year lows.
- Transaction Details: The total transaction value was based on a weighted average purchase price of $4.98 per share as disclosed in SEC Form 4, reflecting Watsa and his team's strategy of deep-value investing during market downturns.
- Brand Rebuilding Challenges: Under Armour has spent the past three years attempting to rebuild margins and brand relevance, and despite measures like SKU reductions and external leadership hires, uneven execution has led to revenue contraction, posing short-term challenges.
- Future Outlook: Despite difficulties, Under Armour's brand still holds recognition and its financial health remains intact; if margin recovery gains traction over the next few quarters, it could trigger a re-rating of the stock, with Watsa's acquisition suggesting a relatively optimistic view on downside risks.
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Analysis of Competition in the eVTOL Market
- Market Outlook: According to Eve Air Mobility's Global Market Outlook, by 2045, there could be 30,000 eVTOLs in operation carrying three billion passengers, despite Joby and Archer lacking FAA approval for commercial flights, which has led to depressed stock prices for both companies.
- Technical Comparison: Joby's S4 and Archer's Midnight exhibit significant design differences, with the S4 achieving a maximum range of 150 miles and a speed of 200 mph, while the Midnight has a range of 100 miles and a speed of 150 mph, highlighting Joby's technological advantage.
- Financial Projections: Analysts expect Joby's revenue to grow from $53 million in 2025 to $458 million in 2028, with a net loss narrowing to $722 million, whereas Archer's revenue is projected to surge from under $1 million in 2025 to $482 million in 2028, but its net loss is expected to widen to $868 million.
- Investment Advantages: Joby's market cap stands at $9.2 billion, trading at 20 times its 2028 sales, reflecting its potential in the
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Joby and Archer's eVTOL Aircraft Prospects
- Market Outlook: According to Eve Air Mobility's Global Market Outlook, by 2045, there could be 30,000 eVTOLs operating globally, carrying three billion passengers, presenting potential market opportunities for both Joby and Archer.
- FAA Approval Challenges: Both Joby and Archer must navigate the lengthy multi-stage approval process from the Federal Aviation Administration (FAA), with full commercial flight approvals likely not occurring until late 2026 or 2027, contributing to stock pressure this year.
- Financial Projections Comparison: Analysts expect Joby's revenue to grow from $53 million in 2025 to $458 million in 2028, while Archer's revenue is projected to surge from under $1 million to $482 million, although both companies are expected to widen their net losses, indicating differing market expectations.
- Investment Value Assessment: Joby trades at a market cap of $9.2 billion at 20 times its 2028 sales, while Archer's $4.0 billion market cap trades at just eight times its 2028 sales; despite Archer appearing more attractive, Joby's vertically integrated model and stronger liquidity position it as a more compelling long-term investment.
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Stephen Curry Partners with Li-Ning for Brand Expansion
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- Market Expansion: Curry announced plans to launch Curry Brand stores in both the U.S. and China, aiming to broaden market coverage and strengthen the brand's competitiveness in international markets.
- Innovative Design: Curry emphasized that Li-Ning is the ideal partner to realize his brand's innovation and design vision, indicating that the future development of the Curry Brand will rely on Li-Ning's support and resources.
- Stock Market Reaction: Following the announcement, Li-Ning's shares rose by 0.2%, reflecting a positive market response to the partnership, which may signal an increase in brand value and future growth potential.
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Under Armour Reports Improved Q4 Net Loss Amid $496M Annual Loss
- Q4 Financial Performance: Under Armour recorded a net loss of $43 million in Q4 FY26, improving from a $67 million loss in the same quarter last year, indicating initial success in the company's restructuring efforts.
- Revenue Change Analysis: Q4 revenue declined 1% year-on-year to $1.2 billion, with North America revenue falling 7% to $641 million, while international revenue rose 10% to $539 million, highlighting the growing potential in international markets.
- Cost and Expense Control: Despite a gross margin decline of 470 basis points to 42.0%, selling, general, and administrative expenses decreased by 15% to $518 million, demonstrating the company's efforts to control costs aimed at improving overall financial health.
- Future Outlook and Strategy: Under Armour anticipates a slight revenue decline in FY27, with low single-digit decreases in North America partially offset by low single-digit growth in EMEA and Asia-Pacific, reflecting the company's strategic adjustments and adaptability in global markets.
See More
Watsa Increases Stake in Under Armour Shares
- Share Acquisition Overview: Prem Watsa purchased 1,178,344 shares of Under Armour across three open-market transactions for a total of $5.9 million, demonstrating ongoing confidence in the company despite having zero direct holdings post-transaction.
- Indirect Holdings Change: Following the transaction, Watsa's indirect holdings increased to 44,179,216 shares, representing 2.74% of total indirect holdings, indicating a strategy of incremental position-building rather than a significant repositioning.
- Market Performance Analysis: Under Armour has a market capitalization of $2.5 billion and a 9.4% decline in stock price over the past year, as the company strives to rebuild margins and brand relevance, facing challenges in execution while also presenting opportunities for recovery.
- Investor Signal: Watsa's purchase is seen as a signal of deep-value investing, suggesting optimism about Under Armour's future recovery, particularly as the company focuses on improving sales quality through SKU reduction and external leadership integration.
See More
Fairfax Financial Acquires Additional Shares in Under Armour
- Share Acquisition: Fairfax Financial indirectly purchased 1,178,344 shares of Under Armour, representing 2.74% of its total indirect holdings, indicating confidence in the company despite its stock nearing five-year lows.
- Transaction Details: The total transaction value was based on a weighted average purchase price of $4.98 per share as disclosed in SEC Form 4, reflecting Watsa and his team's strategy of deep-value investing during market downturns.
- Brand Rebuilding Challenges: Under Armour has spent the past three years attempting to rebuild margins and brand relevance, and despite measures like SKU reductions and external leadership hires, uneven execution has led to revenue contraction, posing short-term challenges.
- Future Outlook: Despite difficulties, Under Armour's brand still holds recognition and its financial health remains intact; if margin recovery gains traction over the next few quarters, it could trigger a re-rating of the stock, with Watsa's acquisition suggesting a relatively optimistic view on downside risks.
See More
Analysis of Competition in the eVTOL Market
- Market Outlook: According to Eve Air Mobility's Global Market Outlook, by 2045, there could be 30,000 eVTOLs in operation carrying three billion passengers, despite Joby and Archer lacking FAA approval for commercial flights, which has led to depressed stock prices for both companies.
- Technical Comparison: Joby's S4 and Archer's Midnight exhibit significant design differences, with the S4 achieving a maximum range of 150 miles and a speed of 200 mph, while the Midnight has a range of 100 miles and a speed of 150 mph, highlighting Joby's technological advantage.
- Financial Projections: Analysts expect Joby's revenue to grow from $53 million in 2025 to $458 million in 2028, with a net loss narrowing to $722 million, whereas Archer's revenue is projected to surge from under $1 million in 2025 to $482 million in 2028, but its net loss is expected to widen to $868 million.
- Investment Advantages: Joby's market cap stands at $9.2 billion, trading at 20 times its 2028 sales, reflecting its potential in the
See More
Joby and Archer's eVTOL Aircraft Prospects
- Market Outlook: According to Eve Air Mobility's Global Market Outlook, by 2045, there could be 30,000 eVTOLs operating globally, carrying three billion passengers, presenting potential market opportunities for both Joby and Archer.
- FAA Approval Challenges: Both Joby and Archer must navigate the lengthy multi-stage approval process from the Federal Aviation Administration (FAA), with full commercial flight approvals likely not occurring until late 2026 or 2027, contributing to stock pressure this year.
- Financial Projections Comparison: Analysts expect Joby's revenue to grow from $53 million in 2025 to $458 million in 2028, while Archer's revenue is projected to surge from under $1 million to $482 million, although both companies are expected to widen their net losses, indicating differing market expectations.
- Investment Value Assessment: Joby trades at a market cap of $9.2 billion at 20 times its 2028 sales, while Archer's $4.0 billion market cap trades at just eight times its 2028 sales; despite Archer appearing more attractive, Joby's vertically integrated model and stronger liquidity position it as a more compelling long-term investment.
See More
Stephen Curry Partners with Li-Ning for Brand Expansion
- Brand Partnership: NBA star Stephen Curry has entered into a partnership with Chinese sportswear brand Li-Ning, focusing on product development and sports culture initiatives to enhance the resource integration and global influence of the Curry Brand.
- Market Expansion: Curry announced plans to launch Curry Brand stores in both the U.S. and China, aiming to broaden market coverage and strengthen the brand's competitiveness in international markets.
- Innovative Design: Curry emphasized that Li-Ning is the ideal partner to realize his brand's innovation and design vision, indicating that the future development of the Curry Brand will rely on Li-Ning's support and resources.
- Stock Market Reaction: Following the announcement, Li-Ning's shares rose by 0.2%, reflecting a positive market response to the partnership, which may signal an increase in brand value and future growth potential.
See More
Under Armour Reports Improved Q4 Net Loss Amid $496M Annual Loss
- Q4 Financial Performance: Under Armour recorded a net loss of $43 million in Q4 FY26, improving from a $67 million loss in the same quarter last year, indicating initial success in the company's restructuring efforts.
- Revenue Change Analysis: Q4 revenue declined 1% year-on-year to $1.2 billion, with North America revenue falling 7% to $641 million, while international revenue rose 10% to $539 million, highlighting the growing potential in international markets.
- Cost and Expense Control: Despite a gross margin decline of 470 basis points to 42.0%, selling, general, and administrative expenses decreased by 15% to $518 million, demonstrating the company's efforts to control costs aimed at improving overall financial health.
- Future Outlook and Strategy: Under Armour anticipates a slight revenue decline in FY27, with low single-digit decreases in North America partially offset by low single-digit growth in EMEA and Asia-Pacific, reflecting the company's strategic adjustments and adaptability in global markets.
See More
