UAA

Under Armour ($UAA): Wall Street Legends' $1.5M Simultaneous Purchase at Stock Bottom

08/21/2025 21:56

Something unusual is happening at Under Armour ($UAA). As the stock has plummeted near annual lows, three independent directors made massive purchases totaling $1.5 million within just a week in mid-August. Notably, some of these directors are legendary Wall Street figures, sending a powerful signal to the market. Founded in 1996, Under Armour has established itself as the third-largest global sports brand after Nike and Adidas. Starting with compression apparel and performance-focused sportswear, it has evolved into a comprehensive sports brand covering clothing, footwear, and accessories. With annual revenue of $5.1 billion, the company operates across North America, Europe, Asia-Pacific, and Latin America. The buying spree began on August 13 when Director Dawn Fitzpatrick purchased 100,000 shares ($493,000), followed by Director Mohamed El-erian with 100,000 shares ($519,960) on August 18, and Director Robert Sweeney with 100,000 shares ($488,200) on August 21. Chief Accounting Officer Eric Aumen also joined with a smaller purchase. This is no coincidence. Fitzpatrick is the former CIO of George Soros's Fund Management and currently manages $13 billion through Scion Family Office. El-erian is the former CEO of PIMCO, the world's largest bond fund, and currently serves as Chief Economic Advisor at Allianz. Their simultaneous personal investments clearly indicate their assessment of Under Armour's current situation. The timing of these purchases is noteworthy. Under Armour's stock peaked at $11.13 in November 2024, then declined continuously to the low $5 range in August. Buying at a point representing a 54% drop from annual highs suggests these investors are confident about the stock's bottom. The external environment surrounding Under Armour is indeed improving. The biggest concern, tariff issues, is being alleviated. The Trump administration significantly reduced Vietnam tariff rates from the originally planned 46% to 20%, reducing burden across the apparel industry. Under Armour directly benefits as Vietnam is a major production base. Signs of fundamental recovery are also emerging. While recent quarterly revenue declined 4.2% year-over-year, margin improvement is evident. The strategy of reducing discounts and focusing on full-price sales in direct-to-consumer channels is paying off. Gross margin improved 170 basis points year-over-year, reflecting the success of the company's premium positioning strategy. Valuation also appears attractive. Under Armour's price-to-sales ratio of 0.43x significantly underperforms the industry average of 1.56x. The current stock price appears to excessively discount the company's fundamentals. With over $900 million in cash, liquidity risk is limited. However, caution is warranted. Revenue decline in the North American market continues, and the footwear segment remains weak. The Asia-Pacific region recorded over 27% revenue decline, raising concerns about weakening brand power. Negative operating cash flow also presents a short-term risk factor. Nevertheless, simultaneous purchases by renowned investment professionals suggest they may have identified value that the market is missing. When individuals like Fitzpatrick and El-erian invest personal funds, it should be viewed as conviction-based investment rather than mere speculation. Key metrics to watch include revenue recovery in North America and preventing further decline in Asia-Pacific. Whether the company's price increase policy will be accepted by consumers is also a crucial variable. With tariff burden relief reducing cost pressures, connecting this to margin improvement could enable an earnings turnaround. Time will tell whether these Wall Street legends' bottom-fishing will prove correct, but at current price levels, the risk-reward ratio appears attractive.