Under Armour Sees $219 Million Insider Purchase, Shares Rally 19%
Major shareholder Prem Watsa purchased $219 million of Under Armour shares from December to early February. The stock rallied 19% on Feb. 6 after an earnings beat driven by a one-time tax benefit, but it trades at a 59x forward P/E and has recorded 11 quarters of declining sales.
1. Prem Watsa’s $219M Insider Buying
Between late December and early February, Fairfax Financial CEO Prem Watsa acquired $219 million of Under Armour shares through his firm’s subsidiaries. This substantial purchase underscores confidence from one of the company’s largest stakeholders.
2. Earnings Beat and Share Rally
Under Armour reported its latest quarterly results on Feb. 6, beating sales expectations and delivering an adjusted EPS surprise, partly driven by a one-time tax benefit. The announcement propelled the stock up over 19% in a single session.
3. Valuation and Sales Trends
Despite the earnings beat and insider buying, Under Armour trades at a steep 59x forward price-to-earnings ratio and has posted declining sales for 11 consecutive quarters. Management projects another quarter of sales decline, raising questions about the sustainability of the current valuation.