The Best Investments for the Next Decade: Lululemon (LULU)
I’m probably the only person who thinks Lululemon Athletica Inc. (NASDAQ:LULU) is the best mid-cap stock to hold for the next 10 years, and that’s OK.
I still believe Lululemon’s CEO, Laurent Potdevin, continues to make the right moves to position the company for future growth.
In April, I suggested that LULU should merge with Under Armour Inc (NYSE:UAA) to bring together two companies that could benefit from each of their strengths while filling some obvious shortcomings. Lululemon shares have gotten a boost in recent weeks over rumors on the flip side of the coin — that the company will be taken private by either a private equity firm or a strategic buyer.
I don’t believe either will happen, but you never know when it comes to M&A.
As for merging with Under Armour, that just got a little harder now that LULU is suing Kevin Plank’s company for allegedly infringing on the design of Lululemon’s Energy Bra, which retails for about $52 — almost double Under Armour’s sports bras.
I say “bravo” to Lululemon. It’s time that companies making quality products stand up to lazy, cheap imitations. Long-term, protecting its brand will pay dividends for its shareholders.