Epic Stock Rebounds: Ulta, Under Armour, and Zoom Bring in Massive Gains
When it comes to investing, I follow this mantra:
Buy shares of what you buy.
This means buying shares in companies that make products or offer services you use in your everyday life.
If you like something, I guarantee millions of other people do too.
For example, in 2007 I bought my first Apple iPhone.
I loved my iPhone … still do!
At the time Apple stock was trading at $12 per share.
Today it’s trading around $183 per share, a gain of 1,371%.
Another example is my love affair with Ulta Beauty.
I’m a big fan of its product offerings, customer loyalty discounts and overall customer service.
This admiration began in 2010, when Ulta was trading at $34 per share. Today the stock is priced around $330, an 855% gain.
Lastly, I placed my first order through Amazon in 2014, and I’ve been a regular customer since.
The stock was already pricey at the time, trading at $288 per share. But now it’s at $1,822, a 532% gain.
But there are times when one of my favorite stocks is beaten down unfairly due to external circumstances, such as the ongoing U.S. trade negotiations with China.
Is that the time to throw in the towel and sell shares?
Actually, it’s an opportune time to buy more shares.
Casualties of the Downturn
A recent example happened between May 7 and May 13.
These bright-red news headlines raced across my computer screen.
They warned of stalling U.S. trade talks with China:
Immediately the markets responded.
The Dow Jones Industrial Average lost 1.8% on May 7 and 2.4% on May 13.
Unfortunately, some of my favorite stocks were casualties of the downturn: Under Armour, Ulta Beauty and Zoom Video Communications.
Under Armour declined 2% on May 7 and 3.9% on May 13:
Ulta fell 1.3% on May 7 and 3.8% on May 13:
Zoom tanked 6.3% on May 7 and 8.9% on May 13:
But I knew these declines were temporary just by looking at each company’s fundamentals.
And knowing I faithfully and happily use their products on a regular basis.
For example, check out these revenue projections.
Under Armour’s revenue is projected to increase 41% by 2023.
Ulta’s revenue is projected to gain 61% by 2024.
Zoom’s revenue is projected to soar 729% by 2024.
And sure enough, when the markets turned higher after May 13…
Under Armour, Ulta and Zoom followed suit, each stock gaining 9.8%, 3.8% and 15.8%, respectively:
These are healthy stock price rebounds from companies with great revenue projections and top-notch product offerings.
And here’s the best part.
You could have purchased call options on these unfairly beaten-down stocks.
Quick Gains From the Rebound
From May 14 to May 21, investors could have walked away with quick gains of 89.6% on Ulta Beauty June 2019 call options.
A 205.3% gain in five trading days buying June 2019 call options on Zoom:
And a stellar 253.5% gain in five trading days buying June 2019 call options on Under Armour:
So, the lesson here is for investors to hold fast.
Don’t give up if a stock you own with great fundamentals and a sought-after product line is unfairly beaten down due to circumstances beyond its control.
As Paul Mampilly’s theme proclaims: Bold Profits investors must have “strong hands.”
Strong hands require you to have a tighter hold on your positions than weak-handed investors.
You must have the conviction to stay true to your investments through market dips.
You can learn more about this strategy by signing up for the Rebound Profit Summit hotlist. To do so, simply click here now.
Until next time,
Director of Investment Research, Banyan Hill Publishing
Editor’s Note: Paul’s rebound strategy has proven so effective that it has made gains of as much as 1,228% in just 90 days. And it’s designed to keep finding these incredible opportunities every 90 days on average, over and over again. All the details will be in Paul’s Rebound Profit Summit, so sign up now! Click here to reserve your spot.