This Stock Will Win Big This Holiday Season

If you're looking for one of the companies that has set itself up for a strong holiday season, you'd better have Under Armour  on your list. The company has been doing a lot right lately, and when the dust settles come earnings season, don't be surprised to see CEO Kevin Plank and co. among the holiday's winners.

Happy holidays
Under Armour has undergone a tremendous holiday push this year with direct-to-consumer and online sales, and 2013 has been a year of great new products as well, products like its ColdGear Infrared line, Spine running shoes, and even Armour39, the company's effort to integrate more technology into the mix along with its recent acquisition of MapMyFitness.

And the company's holiday ad campaign this season has been impressive. Free shipping for any order and free two-day shipping for orders more than $150 digs right in to what we know is the online consumer's No. 1 point of focus: free shipping. Its tremendous ad push has used Google lightbox ads for extremely engaging content.

Return on Social Media (ROSM)
Along with a strong email campaign this season, Under Armour is also embracing social media. To date the company boasts more than 2.6 million Facebook page likes and more than 270,000 Twitter followers. This relatively small investment in social media today will pay big dividends down the road. 

Understanding the opportunity
One of the first things I look for in any potential investment is market opportunity, and Under Armour's is just phenomenal at this point. It's impressive to think that it's actually a small company when compared to the market leader, Nike; in fact, Nike has more than eight times the market cap, an indication there is plenty of room for Under Armour to grow.

According to the National Sporting Goods Association, the market for sporting goods, apparel, equipment, and athletic footwear in the U.S. alone is about $60 billion. But when you pan out and look at all of the opportunities within the sports industry, along with the fact that it's a globalopportunity, $60 billion is just the tip of the iceberg.

Remember, Nike brings in about $26 billion in sales annually; Under Armour hopes to reach $3 billion in 2014. Of that $26 billion Nike brings in, only 45% comes from the U.S. (almost $12 billion). Right now, the overwhelming majority (about 90%) of Under Armour's revenue comes from the U.S., and that is slowly shifting as the company continues to grow.

Ask a Fool, get an answer
I recently filmed an "Ask a Fool" segment on the question "If you had one and only one stock to hold for the next five years, what would it be? For 10 years?" My answer for the 10-year holding? Under Armour. Click here for the video, where you'll get a better idea of my reasoning, along with my answer for the stock I'd hold for five years.

The Foolish bottom line
At the end of the day, Foolish investing is all about finding great businesses and holding them for long periods of time. I'm not arguing that Under Armour's stock is a steal today at 62 times earnings. It doesn't look cheap; great businesses rarely do. But it's a great candidate to buy in stages when the market gives us the opportunity. That's what I'm doing, and you'd be wise to consider doing the same.

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Jason Moser owns shares of Nike and Under Armour. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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