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Under Armour Wins Gold

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After coming under fire last week for its Mach 39 speedskating suit potentially affecting the performance of U.S. speedskaters, Under Armour seems to have cleared its good name today, with the stock up 5% on the news. The suits were developed in participation with Lockheed Martin, and with new evidence coming to light that it may have been the training regimen that affected performance rather than the suits themselves, the U.S. Speedskating Association has renewed its contract with Under Armour. This was the news that the market responded to. In the lead story from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Jason Moser look into Under Armour's speedskating suit incident, and examine the issue from both sides.

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The article Under Armour Wins Gold originally appeared on Fool.com.

Chris Hill owns shares of Amazon.com. Jason Moser owns shares of Amazon.com and Under Armour. The Motley Fool recommends Amazon.com and Under Armour. The Motley Fool owns shares of Amazon.com and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Groupon Is Flailing

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Shares of the daily deals website Groupon pulled back hard today, down more than 20% after the company reported a loss for Q4, and guided lower than expectations for the coming first quarter. Is this cratering temporary, or is this a business that investors should see as fundamentally broken?

In this segment from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Jason Moser take a look at Groupon and its business model. With competition coming from Living Social and other deal providers in this space, Jason sees no real competitive advantage for the company. While it is making a concerted effort to dramatically change its focus and business model toward becoming a massive international hub for all things e-commerce, Jason sees big problems there, too, namely, other e-commerce giants that already have a huge head start. While the stock may look cheap after today's big pullback, Jason reminds investors that cheap alone does not an investment thesis make.

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The article Groupon Is Flailing originally appeared on Fool.com.

Chris Hill has no position in any stocks mentioned. Jason Moser has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Pentagon EOD Division Awards $299 Million in Defense Contracts

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The Department of Defense awarded 13 defense contracts Friday, worth a total of up to $590.4 million.

Two of the largest -- and most ambiguous -- awards went to groups of companies winning contracts to do work for the U.S. Navy's Naval Surface Warfare Center, Indian Head Explosive Ordnance Disposal Technology Division.

In the first contract, with a stated "estimated combined value" of $232.9 million, seven companies have won places within a firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple award contract for "development, product improvement, prototyping, qualification and production support" -- although what exactly is being developed, improved, prototyped, qualified, or supported is not stated. The value of the contract to each contractor depends, in part, on whether the Navy exercises certain "options" to extend the contract's duration past its anticipated February 2015 end date, and, in part, on how many individual task orders the contractor bids for and wins. The contractors winning places in this contract include:

  • Chemring Group subsidiary Hi-Shear Technology, expected to win $33.4 million
  • Danaher subsidiary Pacific Scientific Energetic Materials, $36.7 million
  • General Dynamics , $30.4 million
  • Four privately held companies -- receiving perhaps $132.3 million combined.

The second, similar contract is also a firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple-award contract, is valued at perhaps $66.2 million, and involves -- again unspecified -- work in the areas of "quality evaluation/surveillance program support." The winning contractors here are:

  • Pacific Scientific Energetic Materials, expected to receive $13 million
  • General Dynamics, $15.9 million
  • Science Applications International Corp , $9.6 million
  • Two privately held firms.

 Again, unless options are exercised to extend its duration, this contract will probably wrap up in February 2015.

The article Pentagon EOD Division Awards $299 Million in Defense Contracts originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Boston Beer's Earnings: 1 Thing to Watch

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In this segment from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Jason Moser take a look at Boston Beer ahead of the company's earnings report. Jason discusses why he admires the company's leadership, and gives two initiatives the company is exploring at the moment that have really caught his eye.

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The article Boston Beer's Earnings: 1 Thing to Watch originally appeared on Fool.com.

Chris Hill has no position in any stocks mentioned. Jason Moser has no position in any stocks mentioned. The Motley Fool recommends Boston Beer. The Motley Fool owns shares of Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Investor Beat -- February 21, 2014

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After coming under fire last week for its Mach 39 speedskating suit potentially affecting the performance of U.S. speedskaters, Under Armour seems to have cleared its good name today, with the stock up 5% on the news. The suits were developed in participation with Lockheed Martin, and with new evidence coming to light that it may have been the training regimen that affected performance rather than the suits themselves, the U.S. Speedskating Association has renewed its contract with Under Armour. This was the news that the market responded to. In the lead story from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Jason Moser look into Under Armour's speedskating suit incident, and examine the issue from both sides.

Then, shares of the daily deals website Groupon pulled back hard today, down more than 20% after the company reported a loss for Q4, and guided lower than expectations for the coming first quarter. Is this cratering temporary, or is this a business that investors should see as fundamentally broken? With competition coming from Living Social and other deal providers in this space, Jason sees no real competitive advantage for the company. While it is making a concerted effort to dramatically change its focus and business model toward becoming a massive international hub for all things e-commerce, Jason sees big problems there, too, namely, other e-commerce giants that already have a huge head start. While the stock may look cheap after today's big pullback, Jason reminds investors that cheap alone does not an investment thesis make.

And finally, Chris and Jason take a look at Boston Beer ahead of the company's earnings report. Jason discusses why he admires the company's leadership, and gives two initiatives the company is exploring at the moment that have really caught his eye.


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The article Investor Beat -- February 21, 2014 originally appeared on Fool.com.

Chris Hill owns shares of Amazon.com. Jason Moser owns shares of Amazon.com and Under Armour. The Motley Fool recommends Amazon.com, Boston Beer, and Under Armour. The Motley Fool owns shares of Amazon.com, Boston Beer, and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Pentagon Awards Contracts for Battery Supply, HVAC Work

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The Department of Defense awarded 13 defense contracts Friday, worth a total of up to $590.4 million. Among the winners:

  • Battery manufacturer EnerSys won a fixed-price with economic-price-adjustment contract worth up to $40.3 million to supply the U.S. Army with storage batteries. This three-year contract will run through Feb. 20, 2017, and will not be extended.
  • Rival battery manufacturer Exide Technologies won a similar, but smaller, fixed-price with economic-price-adjustment contract worth up to $18.5 million, also for storage batteries, and also with the U.S. Army being the buyer. This contract will also run through Feb. 20, 2017 and will not be extended. The curious thing about this one is that the company actually filed for Chapter 11 bankruptcy protection back in June.
  • Johnson Controls won a contract -- but although Johnson makes batteries, its contract is not for batteries. Instead, the company's York International Corp subsidiary has won an $11.1 million indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee/firm-fixed-price contract to perform research and development work, testing, and evaluation on shipboard air conditioning and refrigeration modernization programs for the U.S. Navy. This contract is expected to be complete by February 2017.

The article Pentagon Awards Contracts for Battery Supply, HVAC Work originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Strayer Education, Alexander & Baldwin, and Tile Shop Holdings Jumped Today

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Friday proved a fitting end to a relatively quiet week for the stock market, with major-market benchmarks falling 0.1% to 0.2%. After the substantial volatility in stocks so far in 2014, this week was a respite for many investors, but the lazy market day didn't hold back shares of Strayer Education , Alexander & Baldwin , or Tile Shop Holdings from making impressive climbs today.

Strayer soared 38% as the for-profit educator posted fourth-quarter results that were far stronger than even the most optimistic projections from analysts. Although total enrollment at Strayer's schools fell 14%, adjusted earnings were almost a third higher than investors expected, and even an overall 12.5% drop in revenue wasn't as bad as most had feared. Moreover, new enrollment declines appear to be slowing, with the latest figures showing just a 2% drop. With the company pointing to its restructuring during the quarter as a step in the right direction, investors clearly think that the stock has turned the corner after a long decline.


Alexander & Baldwin rose 8% after last night's earnings report included net income that nearly tripled from year-ago figures, on sales that were up about 150%. The diversified company with huge exposure to the Hawaiian Islands now has real-estate, agricultural, natural-resources, and infrastructure-construction businesses, and although low sugar prices hurt its agribusiness segment, solid performance in its other divisions helped Alexander & Baldwin's overall resorts improve substantially. The company's acquisition of Grace Pacific also helped it enhance its focus on Hawaii, which it hopes will pay off as economic conditions continue to improve.

Tile Shop Holdings gained 14% as the specialty-flooring company's earnings report showed revenue growth of 25%, with same-store sales gains of 10.1% helping to demonstrate the company's financial health as conditions in the housing market have improved recently. In addition, the company's 2014 guidance included comps growth of 5% to 7%, with further gains in revenue to a range between $285 million to $295 million, representing 24% to 28% growth over full-year 2013 sales. The results brought a sigh of relief to investors who had feared past allegations of fraud from short-selling firm Gotham City Research, but even after today's gains, Tile Shop Holdings remains well below its peak from last fall.

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The article Why Strayer Education, Alexander & Baldwin, and Tile Shop Holdings Jumped Today originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Tile Shop Holdings. The Motley Fool owns shares of Tile Shop Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Barnes & Noble, Inc Shares Jumped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Barnes & Noble, Inc  were looking smarter today, climbing as much as 14%, and finishing up 5% on a surprise buyout offer.

So what: This afternoon, private-equity firm G Asset Management offered to purchase 51% of the bookseller at a value of $22 a share, or just the Nook unit at a value of $5 a share, if the board is uninterested in selling the entire company. G Asset had originally offered to buy the Nook segment in November at a price valuing the company at $20 a share, though that was not made public at the time, and said today that it was extremely confident that separating the Nook unit would create value for shareholders.


Now what: Barnes & Noble shares peaked at $19.19 today and closed at $17.69, both well short of the $22 offer price, indicating that the market is skeptical that the deal will go through. G Asset is a little-known firm and said that its proposal was subject to raising the necessary financing and performing due diligence, among other factors. Barnes & Noble did not issue a response to G Asset; even if management is uninterested in selling, the offer should provide some solace to investors, showing that there is a potential buyer out there for the struggling bookstore chain. Barnes & Noble will report holiday-quarter results next Wednesday. Analysts are expecting a per-share profit of $0.61 on $2.03 billion in revenue, an 8.8% drop from a year ago. 

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The article Why Barnes & Noble, Inc Shares Jumped originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Emeritus Corporation and Isis Pharmaceuticals, Inc Won Huge Today

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Two big winners in the health-care space today were Emeritus Corp and Isis Pharmaceuticals . In this video from Friday's Market Checkup, Motley Fool health-care analyst David Williamson takes a look at what caused shares to pop.

Seattle-based Emeritus saw shares shoot up more than 35% today on the news that it had agreed to be bought out by Brookdale Senior Living . The combined company will have a presence in 46 states and, with more than1100 facilities, will have a 10% market share. Due to reimbursement cuts from Medicare, scale is vital in this industry, so this could be a very beneficial deal. However, David mentions some caveats that investors will want to keep in mind. He suggests a "wait and see" strategy here, to see if these companies are, in fact, better together than apart.

Also, Isis Pharmaceuticals shot up 15% today after the orphan drugmaker reported positive phase 2 trial results for its drug focused on the rare spinal disorder spinal muscular atrophy. While some analysts have been calling this a potential blockbuster, David tempers enthusiasm, saying it's probably still a bit too early to be making that call. However, he does call attention to the company's partnership strategy and vast number of pipeline assets as indicators that this is definitely more than a one-trick pony, and certainly a company to watch.


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The article Why Emeritus Corporation and Isis Pharmaceuticals, Inc Won Huge Today originally appeared on Fool.com.

David Williamson has no position in any stocks mentioned. The Motley Fool recommends Isis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Pentagon Awards Defense Contracts for Electronic Warfare, Littoral Combat Ships Work

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The Department of Defense awarded 13 defense contracts Friday, worth a total of up to $590.4 million. Among the defense companies winning contracts:

  • Engility won a $40 million indefinite-delivery/indefinite-quantity, partial-foreign military sales contract to perform electronic warfare (EW) weapons systems modifications on U.S. Navy and Australian EA-6B Prowler, EA-18G Growler, E-2C Hawkeye, and P-8A Poseidon aircraft, MH-60R Seahawk helicopters, and Broad Area Maritime Surveillance (BAMS) and other unmanned aerial vehicle drones. Modifications will also be made to flight simulators, training systems, and other advanced electronics. All work under this contract should be completed by February 2019.
  • Lockheed Martin was awarded a $23.6 million contract modification to perform maintenance work on U.S. Navy littoral combat ships through September 2014.
  • Britain's BAE Systems was awarded a $19.2 million option exercise to supply hardware for, and perform engineering work on, U.S. Navy Advanced Gun Systems. BAE will provide mounts for magazine upper pallet hoists, gun cooling assemblies, and centerline hoists, and will perform engineering work thereon. Work on this contract will be completed by January 2018.

The article Pentagon Awards Defense Contracts for Electronic Warfare, Littoral Combat Ships Work originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Pentagon Awards $590 Million in Defense Contracts Friday

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The Department of Defense awarded 13 defense contracts Friday, worth a total of up to $590.4 million. Among the defense contractors winning contracts:

  • Sysco won a sole-source, fixed-price with economic-price-adjustment, indefinite-quantity contract worth up to $24.4 million to provide "prime vendor full line food distribution" for U.S. Army, Navy, and Air Force customers in the Alaska area through Feb. 22, 2015.
  • Rockwell Collins was awarded a $12.2 million sole-source, partial-foreign military sales contract modification adding unspecified "various items" to a Jan. 21, 2014 delivery order to supply joint helmet-mounted cueing systems to the U.S. Navy and to the Israeli military. The underlying contract is now worth $26.9 million to Rockwell Collins, and will be completed by Aug. 31, 2015.
  • Actavis was awarded a $7.7 million option year exercise -- the fourth of seven possible -- on an underlying contract to supply U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agency customers with "various pharmaceutical products." This contract will now run through Feb. 24, 2015.

The article Pentagon Awards $590 Million in Defense Contracts Friday originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Sysco. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Express Scripts Lost Big Today

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Express Scripts fell 4% today, a big fall for a $60 billion company, after it delivered its fourth-quarter earnings. While the company's revenue and adjusted earnings were just in line with expectations, and guidance landed right around what analysts were estimating, as well, the market clearly reacted today to a few disturbing trends within the company.

Revenue for ESRX has declined both year over year for the last two quarters, as well as sequentially, in three out of the past four. While the company has seen earnings per share increase, this was largely due to share buybacks, which are expected to continue. David notes that organic script growth is in decline in 2014, and in this segment from Friday's Market Checkup, he notes that he'll be digging into comments from the company regarding Obamacare, how that legislation is changing its relationships, and if the company plans to keep growing through acquisitions.

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The article Why Express Scripts Lost Big Today originally appeared on Fool.com.

David Williamson owns shares of Express Scripts. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Under Armour Leaves Sochi Controversy Behind

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Source: Under Armour

Under Armour was rising by more than 5% on Friday after the company announced that it will renew its sponsorship of the U.S. speed-skating team for eight more years. Under Armour will remain the National Team's exclusive competition suit provider through 2022, leaving the controversy about the quality of the suits in the past. This is great news for investors in the company.


Dressed for success
The U.S. speed-skating team didn't perform as expected in the Sochi Olympics, and that's a fact. The reasons for the disappointment are up for debate, but the good news for Under Armour is that the suits appear to have no responsibility in slowing down the athletes.

Under Armour´s Mach 39 models were criticized by some athletes, who were claiming that slits on the back could be a drag on performance. However, things didn't improve for the U.S. team after changing the suits for older and well-tested models.

Jillert Anema, coach of the widely successful Dutch skating team, provided a sharp and incisive assessment of the situation in an interview with CNBC: "We have found something that makes the suit very fast," Anema said. "It's the man in the suit."

The U.S. team has now publicly acknowledged that Under Armour is not to blame for its disappointing results during the competition. According to the press release, Mike Plant, President, U.S. speedskating said:

US Speedskating remains extremely grateful to have such a supportive partner and to have access to Under Armour's game-changing innovations, which have helped propel countless athletes around the world to championship results. The length and scope of this agreement send a strong signal about Under Armour's commitment to our athletes and will best position them to skate with confidence and a competitive edge well into the future.

Taking responsibility
Under Armour takes pride in the quality and the degree of technological innovation in its products, so leaving this controversy behind is a big win for the company. Perhaps more important, management did the right thing from the beginning, facing the situation as soon as possible, and traveling to Sochi to make all the necessary adjustments.

CEO Kevin Plank was quite frontal about the issue: "Everyone is looking at it saying what adjustments can be made... It's all very fair and this is our business." he said on an interview with Bloomberg TV on Feb.14.

As it turned out, the suits were not the problem, but if quality had been an issue, the company was ready to take responsibility. This is in stark contrast to the attitude Lululemon Atletica took when facing quality complaints.

Chip Wilson, Lululemon's founder, who back then was also the company's chairman, said in an interview with Bloomberg TV on November of 2013: "Frankly, some women's bodies just actually don't work."

Understandably, this produced further disappointment and even infuriation among Lululemon's customers, so it's no wonder why the company has been reporting uninspiring sales figures during the last several quarters.

Speeding up
Under Armour has big plans for expansion. The company is venturing into different sports disciplines, and strengthening its international presence, so brand building is a crucial variable in the company´s growth strategy.

Under Armour has a big presence in football, and it has recently signed new partnerships to outfit the University of Notre Dame and the United States Naval Academy. In addition, the company is expanding into soccer in Latin America with Colo Colo in Chile and Cruz Azul in Mexico.

While industry titan Nike produced nearly $26.3 billion in revenues during the last four quarters, Under Armour's sales are less than 10% of that amount. Building brand recognition to grow into different countries could be central if the company is going to continue closing the gap in the coming years.

Nike makes more than 50% of sales from global markets, while Under Armour made only $37 million in international revenues in the fourth quarter of 2013 -- 5% of total revenues during the period. International could be the main growth driver for Under Armour in the coming years, and the company needs to make sure to build a solid and reputable brand if it's going to succeed overseas.

Bottom line
For a company like Under Armour, with many years of rapid growth ahead of it, building a solid brand image can be crucial, especially when it comes to international markets, where Under Armour is still relatively unknown in comparison to giants like Nike. Management handled the Sochi situation remarkably well, and Under Armour´s brand is as strong as ever to continue expanding into new markets for years to come.

A winning pick for 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

The article Under Armour Leaves Sochi Controversy Behind originally appeared on Fool.com.

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica, Nike, and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Groupon, United Online, and Financial Engines Tumbled Today

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The stock market didn't make very big moves on Friday, with initial modest gains giving way to modest losses as the Dow and S&P 500 posted declines of about 0.2% each. But for Groupon , United Online , and Financial Engines , there was nothing calm about Friday's trade, as all three stocks posted substantial losses.

Groupon plunged 22% as the daily deals turned online retailer reported its fourth-quarter results, including discussion of how costs of acquisitions related to its attempt to recast itself could hurt its bottom line for an extended period of time. With its online-coupon business deteriorating, Groupon has emphasized sales of actual physical goods as having greater potential for growth. Yet, even though Groupon's holiday-quarter results included revenue growth of 20% and adjusted net income that was better than many investors had expected, the company also projected weaker guidance for the current quarter. That left shareholders questioning whether Groupon's turnaround will justify the big jump in share prices that the company enjoyed in 2013.


United Online dropped 12%, giving back about half of its gains from yesterday's session. It looks like it might have taken investors a while to ferret out the complexities of the Internet-specialist's income statement, with the recent spinoff of florist service FTD leaving United Online with its Internet service provider divisions and certain social-media elements, including the Classmates service. With no expectations of strong growth, United Online doesn't appear to have as much upside potential as yesterday's almost 30% jump would suggest.

Asset-management services provider Financial Engines fell 11%, again after reporting its fourth-quarter results. Even though revenue grew 27% on a 38% jump in assets under management, Financial Engines gave forward revenue guidance for 2014 that implied a much smaller revenue gain of between 14% and 17% this year. Nevertheless, CEO Jeff Maggioncalda called out the company's new Social Security guidance as a valuable add-on in its suite of informational products for retirement investors. With so many baby boomers in or approaching retirement, Financial Engines has plenty of potential to tap into the demographic boom supporting that aspect of its business.

Get your own help with Social Security
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The article Why Groupon, United Online, and Financial Engines Tumbled Today originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of United Online. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Tech Teardown: Feb. 21

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In this episode of Tech Teardown, Erin Kennedy discusses the latest developments in the tech sector with Evan Niu, CFA, our tech and telecom bureau chief.

  • Facebook agrees to acquire WhatsApp for a whopping $19 billion. That's an awful lot to pay, but Facebook will be getting an awful lot in return.
  • WhatsApp costs users just $1 per year. That insanely low price point is precisely how its disrupting a $100 billion industry, which is why Facebook wants it in the first place.
  • Facebook is choosing to pay for WhatsApp mostly in the form of stock. That transfers some future risk to WhatsApp's prior owners, for better or for worse.
  • BlackBerry jumps on news that WhatsApp is selling for $19 billion. Is this move misplaced?
  • LinkedIn makes a big move into content, in part to boost engagement. However, the professional network relies on engagement much less than its peers.
  • One Street analyst compares Apple's future to Microsoft's past. Will Apple be in store for a lost decade?
  • All the recent talk about Apple buying Tesla is just plain silly. Despite Steve Jobs dreams of making a car, this fantasy will never become reality.

Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980's, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in late 1990's, when they were nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play", and then watch as it grows in EXPLOSIVE lock-step with it's industry. Our expert team of equity analysts has identified 1 stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

The article Tech Teardown: Feb. 21 originally appeared on Fool.com.

Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple, LinkedIn, and Tesla Motors. The Motley Fool recommends Apple, Facebook, Google, LinkedIn, Tesla Motors, and Twitter. The Motley Fool owns shares of Apple, Facebook, Google, LinkedIn, Microsoft, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Here Are 20 Billion Reasons Not to Sell Sikorsky

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Turkey plans to upgrade its air forces with more modern versions of this S-70 Seahawk -- already in Turkish service. Photo: Wikimedia Commons

Earlier this month, I laid out three good reasons why industrial conglomerate United Technologies might want to sell its Sikorsky helicopter division --- and four better reasons not to. On Friday, the list of arguments against selling Sikorsky just got longer -- 20 billion reasons longer.

As reported on DefenseNews.com Friday, Turkish Prime Minister Recep Tayyip Erdogan has just announced the conclusion of an agreement to hire Sikorsky to build his country 109 helicopters for an initial $3.5 billion. The helos in question will be a variant of Sikorsky's successful S-70 Black Hawk International platform, specially tweaked for Turkish needs, and designated the "T-70." Upon delivery, they will be parceled out to multiple Turkish government departments -- primarily the Turkish military, certainly, but some of the helos will also go to Turkish police forces, and even to the national Firefighting Department.


What does it mean to you?
Sikorsky's been waiting to get this contract finalized since at least 2011, when Turkey said it was all but ready to conclude the deal -- but had seen it stalled by "US corporate and other bureaucracy." Now that it's going through, though, what does it mean to Sikorsky, and to United Technologies shareholders?

At a minimum, this 10-year production deal looks likely to add $350 million to Sikorsky's annual revenue streams, instantly transforming the UTC division from a $6.25 billion business into a $6.6 billion business.

Conceivably, it could do even more than that. As DefenseNews reports, the contract with Turkey contains "options" that could see Turkey sextuple the size of the deal over time -- from 109 helicopters to more than 600. If that happens, the deal's size could balloon to $20 billion or more.

At current operating profit margins, this could mean as much as $1.9 billion in pre-tax profits for Sikorsky and for United Technologies over the life of the deal. Alternatively, United Technologies may decide to monetize its subsidiary immediately. At the valuation of 1x sales common for pure-play defense contractors, victory in the Turkish contract means United Tech can probably expect to sell Sikorsky to an interested buyer for at least $350 million more today than it could have gotten before the contract was announced. That's a very nice potential profit for United Technologies.

Best of all -- United Technologies wouldn't have to go to the trouble of building a single helicopter to earn it.

Oh, and one more thing
In addition to the potential payoff, did I mention that United Technologies already pays its shareholders a 2.1% dividend yield? Mustn't forget that bit -- because, over time, generous dividend-paying stocks like UTC can make you rich. While they don't garner the notability of high-flying tech stocks, dividend-paying stocks are also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article Here Are 20 Billion Reasons Not to Sell Sikorsky originally appeared on Fool.com.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Facebook's Big Buy Makes Perfect Sense

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Facebook  is dropping a pretty penny to acquire WhatsApp, the young mobile messaging platform that has taken off. WhatsApp now boasts over 450 million monthly active users, with an incredible 70% of those accessing the service on a daily basis. That's an even higher level of daily engagement than even Facebook enjoys.

For $19 billion, Facebook will gain an important foothold in key strategic areas. Facebook's own Messenger has never been positioned as a mobile real-time messaging service. Since Messenger was historically a desktop service before expanding into mobile, it has social expectations somewhere in between SMS and email. In contrast, WhatsApp is very much mobile first and a legitimate SMS replacement. The two services has very different use cases.

Furthermore, the deal will also dramatically expand Facebook's international presence. In the U.S., players like Apple  offer iMessage for free. Apple grabbed 45% of smartphone sales last year, and if the majority of someone's contacts are on iMessage, there is less reason to sign up for WhatsApp. WhatsApp is incredibly popular in geographies like Europe, Latin America, India, and Asia, which is good news for Facebook.


In this segment of Tech Teardown, Erin Kennedy discusses Facebook's big buy with Evan Niu, CFA, our tech and telecom bureau chief.

Will Facebook miss out on the next big thing in tech?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980's, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in late 1990's, when they were nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play", and then watch as it grows in EXPLOSIVE lock-step with it's industry. Our expert team of equity analysts has identified 1 stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

The article Why Facebook's Big Buy Makes Perfect Sense originally appeared on Fool.com.

Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Despite a Strong Day by Walt Disney and Nike, Dow Can't Find Green

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Despite popping higher this morning and in the early afternoon, the major indexes finished today's session in the red. The Dow Jones Industrial Average lost 29 points, or 0.19%, while the S&P 500 also declined 0.19% and the Nasdaq fell 0.1%. The moves lower came after the National Association of Realtors released data indicating that existing home sales in January had declined by 5.1% to the lowest seasonally adjusted rate since July 2012, to 4.62 million homes. This does not bode well for the economy at this time, and it increases the likelihood of confusion and mass speculation about what the Federal Reserve will do at its next open committee meeting. This likely increases market volatility.

But even though the Dow, as a whole, moved lower today, a few big winners could still be found -- Walt Disney , for example, rose higher by 1.19%. Recently, we have seen a number of issues within the television industry, as contract problems with the content providers and the service operators had millions of Time Warner customers missing channels. Then, the Comcast-Time Warner acquisition. On top of that, investors and analysts keep worrying about the possible mass cord cutting we are about to see in the future. The whole time though, Disney, the one company that makes more in TV distribution fees than anyone else in the world, is still stable and not showing any concern. The company has signed deals with all the major service providers, and has even inked a very lucrative deal with Netflix, which will help the company stay connected to customers, even if they cut the cord. I have mentioned in the past that Disney has built a nearly bullet-proof business; its TV studio is a big part of that.


Another big Dow winner today was Nike , as shares also rose 1.19%. The move comes while competitor Under Armour is having a great day on Wall Street, with shares higher by 5.12%. Under Armour inked a deal this morning that will make it the official sponsor of the U.S. speed-skating team for another eight years. While investors cheer the Under Armour deal, the whole thing just points to the strength that Nike has over the industry, and the massive head start it has over the other players. Last year, Nike posted revenue of $26.3 billion, but Under Armour sold less than 10% that amount during the year. While the younger company does pose a threat to Nike over the long run, at this time, the company and its investors shouldn't be too concerned, because Under Armour still doesn't really operate outside the U.S. on any meaningful level.

Another big winner today was Rite Aid , which closed the day higher by 2.14%, after trading higher by more than 5.2% earlier in the day. The move comes with little news pertaining to the company, but on trading volume which was almost twice that of the average day's 27 million shares, when more than 50 million changed hands this afternoon. The company is in the midst of a turnaround, and the share price has increased more than 324% during the past 52 weeks, while the S&P 500 was up a measly 23% during the same time frame. But even after that massive move higher, the stock is still only trading at 22 times past earnings. If the company can continue to perform well, the stock will continue climbing higher, and current shareholders should continue to hang on for the ride.

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The article Despite a Strong Day by Walt Disney and Nike, Dow Can't Find Green originally appeared on Fool.com.

Matt Thalman owns shares of Under Armour and Walt Disney. The Motley Fool recommends Nike, Under Armour, and Walt Disney. The Motley Fool owns shares of Nike, Under Armour, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Barnes & Noble and Safeway Climb on Buyout Offers

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks survived a rocky housing report to finish the day essentially flat as the Dow Jones Industrial Average  fell 30 points, or 0.2%, while the S&P 500 dropped by the same percentage. The Dow was actually trading in positive territory most of the day, but slipped toward closing, in part due to a flurry of activity from options traders as those positions expired at market close.

Existing home sales fell to its lowest level in 18 months in January, as annualized sales hit 4.62 million, down from a mark of 4.87 million in December, and worse than estimates at 4.7 million. The report was just the latest data point to indicate the economy has slowed, though investors have attributed the poor numbers to bad weather. The National Association of Realtors said as much, as chief economist Lawrence Yun noted, "Some activity will be delayed until spring;" but Yun also acknowledged that tighter inventory and rising prices and mortgage rates may have cooled off the market.


Turning to individual stocks, Barnes & Noble  finished up 5.4% after the bookseller received a surprise buyout offer. G Asset Management, a small private equity group, offered to purchase 51% of the company at a value of $22 a share, or just the Nook unit at a value of $5 a share. G Asset had previously proposed in November to acquire the Nook unit at a price valuing the company at $20/share, but B&N turned down that offer. Shares closed at $17.69, indicating the market doesn't really see this deal going anywhere; but it should provide some comfort to investors knowing there is a potential buyer out there for the struggling retailer. Barnes & Noble will report earnings next Wednesday, and will likely shed more light on any potential sale.

Another stock moving higher on deals news was Safeway , which finished up 4.3% after confirming that it was in talks to sell itself to Cerebrus Capital Management. A Reuters report this afternoon said the grocery chain was in "advanced talks" with the private equity firm for a leveraged buyout deal that could be reached in as soon as a few weeks. Cerebrus is no stranger to the industry, having bought several grocery chains from SUPERVALU last year, so the purchase would make sense for the buyer, giving it a dominant position on the west coast. There is no price tag on the deal yet, but Safeway, with a market cap of $8.8 billion, hit a 52-week high on the news at $37.70. Continued share appreciation could force Cerebrus to act faster, as the stock is likely to rise if investors suspect a coming sale.  

Two retailers poised to pop
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The article Barnes & Noble and Safeway Climb on Buyout Offers originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Amarin Given 3-Year Exclusivity for Vascepa

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Amarin has received an important approval from the Food and Drug Administration, but the company is not necessarily happy about it. The FDA  awarded the firm three years of marketing exclusivity for Vascepa capsules. That approval expires in July 2015, as it is backdated to the original approval granted Vascepa for the treatment of severe hypertriglyceridemia. This disorder is the overabundance of triglycerides, a fatty molecule, which puts the afflicted party at risk of pancreatitis.

In the press release announcing the news, Amarin made little attempt to hide its dissatisfaction with the term of the approval, hinting at a potential effort to lengthen it. The firm quoted its CEO John Thero as saying that, "Amarin is reviewing the FDA's reasoning for granting Vascepa three-year, rather than five-year, exclusivity, and evaluating whether to challenge the decision."

The article Amarin Given 3-Year Exclusivity for Vascepa originally appeared on Fool.com.

Eric Volkman has no position in Amarin. Nor does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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