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Final Stock Pick for our Core Fund

April 21, 2024
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Wiko Steyn
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Wiko Steyn

#20 of 20 stocks added

 

Lululemon the King of Athleisure 

We are finally at a point where we have selected 20 of our favourite growing industry leaders. Our last pick is a bit out of character with the rest of our companies since it is an athletic apparel stock. More specifically, high-quality yoga pants, but don't let that fool you, they have a cult-like following and essentially invented the athleisure market. It is not a well-known name in South Africa but the numbers don't lie, Lululemon is massive in America, and doing more than $6 Billion in revenue. They are not at Nike or Addidas level yet, but they have already surpassed Under Armour and even more impressive, they are still growing at double digits. 

 

So what makes Lululemon yoga pants so special? The brand is associated with quality and they have basically become the Apple of yoga pants, meaning you don't really have a choice, you almost have to own a pair, if you can afford it. The main reason we picked this company is that they are still obsessed with innovation. Whitespace is their innovation lab where they conduct studies on human movement. They built the space to understand their customers and how they move to the finest detail so that they can design the highest performance clothing. Combined with their ultralight and high-quality fabrics, they are one of the most technically innovative clothing brands today.

 

Optionality for this company is massive and they are now expanding globally and into different sectors like men's clothing and digital fitness. Let's face it, this is a competitive market but Lululemon has been able to stay one step ahead by building one of the most loyal fan bases of any clothing brand, which is quite an achievement.

 

We still have some capital left to allocate to most of Core Fund stocks but we have now transitioned into the most difficult part of investing, the waiting game. We know we have been using a lot of Warren Buffet quotes but he has a certain way of portraying financial concepts with so much insight and this is one of our favourites:

The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient

 

Portfolio Update Summary

  • Buy $250 LULU at $272.01
  • Buy $250 AMD at $75.70
  • Buy $250 TTD at $40.91
  • Buy $250 AMZN at $103.68



Disclosure

This article is not financial advice and is based on the opinion of the author. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products. The $20K in the Core Fund is not real money and only a demonstration of a typical portfolio. This is an actively managed portfolio, where we will buy and sell positions as we deem fit without any regard for taxation. Remember, all selling of stocks triggers a tax event in most countries and it is the investors personal responsibility to always remain tax compliant.


 


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