Guru Steve Mandel (Trades, Portfolio) graduated from Dartmouth College in 1978 and earned an MBA from Harvard Business School in 1982. Mandel landed his first job at Mars & Co., a global strategy consulting firm. In 1990, Mandel began to work for Julian Robertson (Trades, Portfolio)’s firm Tiger Management. Mandel worked alongside the legendary guru for seven years before founding his own investment firm Lone Pine Capital LLC in 1997. The firm was named after a pine tree that survived a lightning storm at Dartmouth.Â
In the first quarter of 2016, Steve Mandel (Trades, Portfolio) added 98,459 shares of Lululemon Athletica Inc. (LULU, Financial)
Lululemon Athletica was founded by Chip Wilson after he took a yoga class offered in Vancouver, British Columbia. Cotton clothing was being used for sweaty, stretchy power yoga, and that was irrational to Wilson because he knew that better clothing products must be used for vigorous athletic activities. Wilson had a passion for technical fabrics and he decided to form a design studio to produce clothing that could be used for yoga and various other athletic activities. This is when a design studio was born that became a yoga studio at night to pay for the costs and rent. The success of the clothing was dependent on the feedback from yoga instructors who were asked to wear the products and provide their insights.
The first store opened in the beach area of Vancouver in November 2000. Lululemon Athletica now has stores located across the world in Australia, Canada, China, Germany, United Kingdom, Hong Kong, Japan, South Korea, The Netherlands, New Zealand, Singapore and the U.S. They sell various products such as fitness pants, shorts, tops and jackets that are designed for healthy lifestyle activities such as yoga, running and general fitness. Lululemon Athletica owns trademark registrations for names of several of its products including Luon, Silverescent, VitaSea, Boolux, Luxtreme, Luxchange, Groove Pant, Light as Air, and Power Y.
GuruFocus gives Lululemon Athletica an 8/10 profitability and growth rating with an operating margin of 18.38%, which ranks them higher than 92% of the companies in the Global Apparel Stores industry.
Since the company was originally founded in 1998, Lululemon Athletica has been able to successfully expand their operations globally while maintaining no debt, which is a great sign. The company has a market cap of $8.02 billion, a P/E ratio of 33.91, an enterprise value of $7.62 billion and a quick ratio of 2.74.
Below is a Peter Lynch chart for Lululemon Athletica Inc.
Lululemon Athletica is a profitable investment for the following reasons:
- The company is trading below its intrinsic value.
- The company has excellent profitability and growth.
- The company has no debt.
- The company has excellent customer service.
- The company's CEO is Laurent Potdevin, a vigilant leader who has over 25 years of experience in the retail industry, including five years as president and CEO at Burton Snowboards, one of the world's leading snowboarding companies.
Cheers to your investment success.
