Why Lululemon's Stock is the Talk of the Town—And Burry's Big Bet

A Familiar Scene: Lululemon’s 2010 Valuation Returns

Lululemon Athletica Inc. is fascinating the investment world by returning to valuation levels last seen in 2010. This rebirth on the financial scene has caught the eye of famed value investor Michael Burry, whose recent actions could be seen as a seal of approval. As stated in Benzinga, Lululemon’s stock journey is captivating investors with a blend of nostalgia and opportunity.

A Bargain in Plain Sight

Known for its upscale athletic apparel, Lululemon now offers an intriguing prospect for investors seeking lucrative opportunities. Remarkably, even with a strong 43.35% return on equity and a modest P/E ratio of 13.76, the stock’s price of \(203.62 per share significantly trails its 200-day moving average of \)308.29. This disparity suggests a potential bargain for savvy investors eyeing upscale brands at reduced rates.

Burry’s Bold Move

Michael Burry’s addition of 50,000 LULU shares to his Scion Asset Management portfolio speaks volumes. This decision places a whopping 16.43% of his fund behind Lululemon, a brand suggesting bullish prospects among investors. Burry, acclaimed for unearthing hidden gems like his foresight during the housing bubble, seemingly sees significant ongoing potential in Lululemon. Could this herald a $400 target over the next year?

Technical Triumphs: Charting the Breakout

LULU’s journey isn’t just being powered by its past as the stocks achieve technical milestones, creating buzz in trading circles. Having surpassed its eight-day simple moving average of $194.71, the crossing of LULU’s MACD above the signal line sends out bullish vibes. As momentum indicators grow optimistic, the suggestion is clear: Lululemon’s stock has ample room to move upward. A current RSI of 44.76 further indicates opportunity, as it suggests the stock is neither overbought nor oversold.

The Rarest Opportunity: Premium Brands at Discounted Prices

Valuations unseen for a decade may seem like a throwback, but coupled with growing breakout momentum and pivotal support from investors like Burry, the prospects for Lululemon seem promising. For investors, this could be one of those rare moments to capture a premium brand at old prices. It raises the tantalizing question: could Lululemon be on the verge of its own ‘Nike moment’ in the market?

With Burry’s endorsement and potent mix of technical success, opportunity knocks for those eyeing Lululemon’s likely ascent in the investment echelon.