UAA - Under Armour: Multiple Compression Cycle Makes It A Sell

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Introduction

I focus most of my investment research time studying cycles. There is one type of cycle I haven't written much about even though it is fairly common. It is what I call a "multiple compression cycle". The "multiple", in this case, refers to the P/E multiple, and the "compression" refers to the long-term and often permanent trend of that P/E multiple shrinking from very high levels (usually above 40) to P/E levels more typically found in the market (say from 12 to 25).

For many stocks, after they go public, they

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