LULU - Lululemon Athletica

Burry bought Lululemon as a beaten-down value stock.

Listed with 23% expected IRR, meeting host's 15%+ margin-of-safety threshold; considered attractive buy.

Burry built a full-size stake, seeing Lululemon as a quality brand left for dead while money chases AI. He cites China growth, international expansion, premium margins, and resolved proxy fight.

Burry built a full position at around $120. Down over 40% this year, completely left behind in the AI rush. No analyst upgrades in the past month — exactly the neglected situation Burry looks for. Athletic wear retail brand with strong brand loyalty.

The host sees Lululemon as good value at current pricing. It has industry-leading margins, strong cash flow, and beautiful overseas growth. The forward PE of ~10.9 is reasonable for the consumer discretionary space (average ~10.5). Michael Bur has been aggressively adding to his position. The company is pivoting back toward high-margin consumers after a period of chasing lower-end customers.

Listed among the 10 stocks with potential for 15%+ annualized returns over the next 10 years based on Paul's assumptions.

Cited as an example of a famous brand that dropped 26% in six months while the market went up. The lesson is to rotate out of such losers into stronger performers.

The stock is currently facing challenges, and the speaker prefers to wait for a more favorable entry point.

In stage four free fall, down 80% from $500 to $120. Earnings falling, sales flat. Great company but no demand for the stock. Not a buy for swing trading.

New board member Chip Berg (former Levi CEO) bought 6,090 shares at $164.20 through his family trust. Interim co-CEO Andre Messier bought 3,275 shares at $151. Elliott Management built a $1B+ activist stake. International revenue growing 22% with China up 28%. New permanent CEO Tamara O'Neal from Nike starting September 8th. Stock down ~50% from highs, presenting a potential turnaround opportunity.