lululemon athletica inc. (NASDAQ:LULU)

@ 52week high, betting on some profit taking

I jumped on the short bus a little early simply because of the fad aspect. They have certainly grown their potential, but it would be a little dubious to say that a maker of athletic wear who really has no other competitive moat besides the fact that people know their name, and that they are obviously the largest fitness apparel company focusing on the yoga/pilates/etc. trend, is worth this much. Brand name can get you far in some industries, such as ones with extremely large potential markets like beverages (i.e. Coke), but fitness apparel is not one of them. Other household names could easily enter this industry and steal valuable market share in an industry with very little room for growth in the potential customers.

Those who are going to buy from lululemon most likely already have, and could certainly stay loyal, but realistically how much room is there for customer growth? This is not a company who is worth almost 60 times earnings. It may still be worth higher than a mature company, given that it still might have a little growing to do, but even a 20 times earnings multiple puts this company at closer to $20-$25. And who knows if that is even worth it if other companies come in and steal market share.