This weekend, Jordan Spieth became the second youngest player to win the Masters, shooting 18 under and holding off other veteran major winners Rory McIlroy and Phil Michelson. But while Spieth collected a brand-new green jacket on Sunday, it’s his sportswear sponsorship company Under Armour, Inc. (NYSE:UA) that will dress Spieth for years to come.
UA stock has struck gold in the company’s sports star endorsers this year. Jordan Spieth has just won one of golf’s most cherished tournaments, while fellow Under Armour endorser Stephen Curry is doling out an MVP campaign with the NBA’s Golden State Warriors.
The phenomenal publicity of these stars will do nothing but add to Under Armour’s marketing pitch and help sell product — an attractive prospect if you’re already long or looking to buy UA stock.
UA Hits a Hole-in-One With Jordan Spieth
Under Armour signed Spieth back in 2013, before the young golfer had played in his first professional tournament. While untested then as a pro, Spieth had solid amateur credentials: He also reached No. 1 in the World Amateur Golf Rankings in 2012 and won the U.S. Junior Amateur twice — in 2009 and 2011. Spieth is one of just two players to ever accomplish the latter feat. The other? Nike, Inc.’s (NYSE:NKE) Tiger Woods.
Then earlier this year, Under Armour made what now looks like one of the shrewdest moves in sponsorship history, signing Spieth to a new 10-year deal.
Spieth already came in second in last year’s Masters, but his play this past Sunday really helped elevate the UA brand in golf. In the last round at the 2015 Masters, Spieth was covered in Under Armour logos, his hat to his shoes. After the golfer finished his round, he hugged Ryan Kuehl, UA senior director of golf.
The timing couldn’t have been better for Under Armour. Last week, UA released its $180 golf shoe, Drive One — the same shoes Spieth wore over the weekend.
In its last annual release, Under Armour reported that its apparel net revenues grew 30% to $2.29 billion compared to $1.76 billion a year prior. Part of that growth came from UA’s expansion into golf.
If Spieth has staying power — at the tender age of 21, he has the chance — his association to Under Armour will raise the visibility and marketability of its golfing brand for a long time, helping to carry UA stock even higher.
UA Shoots and Scores With Stephen Curry
Stephen Curry signed with Under Armour back in 2013 after endorsing NKE earlier in his career. Two years later, Curry is the leader in the MVP clubhouse, topping the league in 3-point scoring on the best team in the NBA.
Under Armour isn’t letting this opportunity get away, either.
This past February, UA released Curry’s first signature shoe, the Curry One, which retails at $120. While it doesn’t hurt that Curry routinely makes sports highlights, UA promoted the star and the show in a flashy television ad that also starred Oscar-winning actor Jamie Foxx. The ad is in heavy rotation during NBA games.
In the last annual review, Plank said that its footwear business grew by 44%, due in part to UA’s basketball line. Plank further added that Curry’s endorsement is instrumental in continuing Under Armour’s momentum its footwear growth.
Curry isn’t as young as Spieth, but he’s still south of 30 years old. Just like Jordan Spieth can help raise the visibility of Under Armour’s golf products, Curry can bring a lot of cache to Under Armour’s offerings in basketball — a sport long dominated by Nike.
Stars Are Aligning for Under Armour
Under Armour didn’t exactly need Spieth and Curry’s latest spurts — UA stock has had phenomenal momentum for some time. Under Armour is up 25% year-to-date, 67% in the past year and nearly 1,000% over the past five years, which has included a pair of 2-for-1 stock splits.
UA’s latest net revenue grew to $3.02 billion last year, an all-time high for the company, and made it only second to NKE in sportwear.
But the added visibility that will come with Jordan Spieth’s Masters win and Stephen Curry’s MVP-worthy season is aligning the stars around this galloping growth stock.
Count Under Armour among stocks you should buy, and soon.
As of this writing, Johnny Chen does not hold a position of any of the aforementioned securities.
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