Kudos to Cramer on Under Armour (UA)

I don't watch the Cramer show often, but I do try to skim through the "Mad Money" highlights from the website. I get enough Cramer all day from the RealMoney.com site :)

I do have to give kudos to him, for last night's show. Per the recap it says

During his "Sell Block" segment, Cramer urged viewers to take Under Armour (UA) off the table. He said it is a high-multiple stock that has lost its momentum.

Usually when he hears about increases in inventory from a company during a conference call, it is a red flag, Cramer said. But when he heard about it from Under Armour he went against his rules and thought it was OK to buy it because the company's CEO Kevin Plank was so positive on the stock.

Then three insiders sold some positions of their stock. Cramer said he doesn't know why these insiders sold, but they crossed a line. He said he doesn't believe Under Armour would have been up nearly as much after its inventory increase if he hadn't championed it.

Cramer said he feels like a dope because these three insiders were able to sell their stock at higher prices.

Moreover, he said the company is losing momentum. He also said retail is a tough place to be right now and the remaining markets Under Armour wants to get into are going to be defended like crazy by competitors like Nike (NKE).

"Sell Under Armour," Cramer said.

In my entry [Cramer and Under Armour] I wrote:

Now back to Cramer - I remember his comments struck me on Under Armour (UA) because he got down on Crocs for basically the same issue he was lauding Under Armour. The only difference? One stock was going up, and one down - hence he was applauding the inventory issue at UA, the same issue he was not happy about with former fan favorite Crocs.

I believe on this one he let the price action get ahead of his better judgement; in face he basically said as much.

So again, there is no way Cramer could of known about the insider selling, but his cheering of a higher inventory number (which he would crucify any other retailer for) only because the stock was up post earnings, is what troubles me. Again, momentum begets momentum - and Cramer has become the king of the momentum investors. This works in today's day and age, more often than not, (see Baidu.com, see First Solar, see Research in Motion) but instead of blaming insider selling, I believe Cramer should say "I was wrong on the inventory issue" - it's never good for any retailer.

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Hmmm... almost verbatim. Per my Google web page analytics, I do have a lot of readers from New York.... ;)

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