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Big Money, Lululemon Working Out Again

By:
Lucas Downey
Published: Sep 19, 2022, 12:09 UTC

Lululemon Athletica Inc. (LULU) stock has jumped lately, rising 19.8% over the last three months.

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And the Canadian “athleisure” apparel company could rise more due to its dominant market position and a new sales focus. But another likely reason is Big Money lifting the stock once again.

Lululemon Attracts Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Lululemon has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares over time.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

Of course, when tides turn, sometimes Big Money sells. That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at the Big Money signals LULU has made over the last year – lots of buying and selling.

The last few weeks have seen Big Money activity too. Each green bar signals big buying volumes as the stock ramped in price:

Chart, histogram Description automatically generated

Source: www.mapsignals.com

In the last year, the stock attracted 14 Big Money buy signals and 11 Big Money sell signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out the technical action grabbing my attention:

Outperformance is important for leading stocks.

Lululemon Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Lululemon has had double-digit sales and earnings growth. Take a look:

  • 3-year sales growth rate (+24.6%)
  • 3-year EPS growth rate (+31.4%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, LULU has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has had buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

LULU has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 95 times since 2007, with its first appearance on 08/17/2009…and gaining 3,458.4% since. The blue bars below show when Lululemon was a top pick:

Chart, histogram Description automatically generated

Source: www.mapsignals.com

It’s been a top stock in the consumer discretionary sector according to the MAPsignals process. I wouldn’t be surprised if LULU makes additional appearances in the years to come. Let’s tie this all together.

Lululemon Price Prediction

The Lululemon rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds long positions in LULU in personal and managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Contact

https://mapsignals.com/contact/

About the Author

Lucas Downeycontributor

Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.

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