First, in regards to Garmin (GRMN), an excellent stock and company dealing with GPS - I initiated a position in this high flyer around $90 back on August 16th. A small position unfortunately. The stock is now near $120. So I am selling today at $117. This is roughly a 30% gain in about 5 weeks. Again, another case of the correct stock, but not large enough of a holding to impact the fund as a whole to a great degree. If I had a larger position I would not be selling completely out, and again when I add a new name I want to look for other names to cut out as I don't want the # of holdings in the fund to get bloated.
Garmin when I bought at $90 was priced at a forward PE of 27; at $117 that has now gone up to 35. While the company is hitting on all cylinders, as a hardware maker I just wonder when the lower priced competition is going to start affecting margins - but with that said, I have been asking that question for about 3 quarters now and the company just keeps on rolling.
I am replacing Garmin with the EXTREMELY pricey retail stock Under Armour (UA). It won't be a huge position - just beginning with a 125 share stake as the company has pulled back to its 50 day moving average on a downgrade this morning from UBS. This will give UA a stake of about 0.7% in the fund. I will see if I can add more lower although Under Armour has not fallen below its 50 day moving average since June. But if the market pulls back, it could fall through. The company was roughly $67 a week ago so I am buying about 12% down from its peak.
While I am bearish on retail as a whole a few speciality names I believe will pull through and this is one of them. However, at this valuation it's hard to get excited on major upside in the near term. So I will start slow and re-assess. (with that said, that is the exact same thinking for how I started my position in Garmin only to watch it run away from me) :)
Long Under Armour in fund; no personal positions
