adidas AG (ADR) (OTCMKTS:ADDYY) is the NextGen leader in athletic apparel.
The key to investing in NexGen stocks is determining which companies will be leaders in the future. We don’t want to look in the rearview mirror; instead we want to see who is gaining market share today.
That’s what led me to invest in ADDYY.
I took a trip to Europe last summer and was surprised to see the significant amount of Adidas merchandise on both the millennials and in stores. I follow the notion that you should invest in what you know. So when I came home and did my research I was thrilled to see that the stock turned out to have fantastic investment potential.
This fashion trend hadn’t quite made its way to the U.S. at the time I took my trip. But take a look at what shoes the younger generation is wearing next time you walk down a city street. I think you’ll be surprised to see an overwhelming amount of ADDYY. And I have to admit I’m not immune to the attraction either — I own a pair of Adidas Superstars myself.
Changing Trends Lead to New Leaders Like ADDYY
When it comes to fashion, even in sports, there is always a trend changing. Nike Inc (NYSE:NKE) used to be the leader in this space, but over the last couple of years it has started to feel the heat from its competitors.
Adidas is now at the forefront as it catches the eyes of millennials. And I believe ADDYY is well positioned to continue taking market share both domestically and abroad.
In fact, Adidas’ CEO Kasper Rørsted announced on February 28 that sales grew 15%-20% to more than $24 billion in 2017 — led by strength in China, North America and e-commerce. The final full-year results will be reported on March 14. And a company spokesperson recently said that revenue growth is estimated to come in between 17% and 19%.
As you can see from the chart, ADDYY stock has spent the last six months trading sideways after spending a few years in full rally mode, but this consolidation is acceptable during a long-term bull market.
Plus, it gives investors an opportunity to buy ADDYY before its next breakout above $120.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.