UA – Under Armour, Inc – last closed at $69.96 – Bullish (Long term)

Under Armour, a sportswear giant’s stocks fell about 11% yesterday, with the news of Morgan Stanley Downgrading the stock to “Sell”. Jay Sole, an analyst at Morgan Stanley, cut its stock price target for UA from $103 to $62. According to Jay Sole, the UA has changed its pricing, and marketing strategy. “UA has always competed on brand image and innovation, rarely on price. This change in trend is a major concern because this positioning threatens to erode UA’s premium brand image and ultimately its long-term growth potential.” he says.

A 2014 report from Sport Scan said Under Armour surpassed Adidas to become the No. 2 sportswear brand in the U.S., trailing only Nike Inc. Under Armour revenue at the company has grown at least 20 percent in 22 consecutive quarters. The revenue for Q3 has been looks good for the company.

The downgradation of the stock looks like the only reason for the stock price fluctuations. So, according to analysts, though the market sentiment is bearish, it might be short lived and the market would be bullish for long term investors.

BLUE – Bluebird Bio – last closed at $44.64 – Bullish (long term)

Bluebird Bio is a clinical-stage biotechnology firm, with a focus on gene therapy.

In the recent release of its presentation, Bluebird will not be giving an update on the much awaited LentiGlobin BB305. LentiGlobin BB305 is an experimental treatment for beta thalassemia, a rare and potentially debilitating blood disorder. It was given “breakthrough therapy” designation by the Food and Drug Administration in February, 2015. The update is expected to be given in the next American Society of Hematology meeting. This has been the reason for unhappiness amongst the investors. Adding to this, the Bio industry in general is having a rough time.

On the plus side, President and CEO Leschly Nick has bought 9,682 shares last month. Maxim Group has reiterated its buy rating for BLUE with the price target of $190 & $105. According to an article by BNKInvest in www.nasdaq.com, BLUE currently has an oversold position with its RSI as low as 24.8. They write- “A bullish investor could look at BLUE’s 24.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.”

 

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