Academy(ASO) The Motley Fool·2024-12-14 23:12Group 1: Market Overview - The S&P 500 is up nearly 27% in 2024, indicating a strong year for average stock market returns [1] - Some stocks, including Crocs, Academy Sports, and Universal Display, are underperforming compared to the S&P 500 [2] Group 2: Crocs - Crocs is trading at 8 times earnings, significantly lower than many stocks trading over 20 times earnings [4] - The core Crocs brand is expected to grow with an 8% year-over-year revenue increase, while the HeyDude brand is projected to see a 15% revenue drop [5][7] - Crocs has paid back over $1 billion in debt over the past two years and is now repurchasing shares [6] Group 3: Academy Sports - Academy Sports is also trading at about 8 times earnings and is positioned for better growth opportunities [8] - The company generated an average of $22 million in sales per store in 2023, significantly outperforming peers, and has improved its net profit margin to over 7% [9] - Academy Sports plans to open up to 25 new stores in 2025, representing nearly 8% growth [10] Group 4: Universal Display - Universal Display holds over 6,000 patents and is a leader in OLED technology, which is energy-efficient and in demand from mobile device manufacturers [12][13] - The company has a high net profit margin of 37% and invests heavily in research and development [14] - Management is close to commercializing PHOLED blue technology, which could enhance display energy efficiency by 25% [15][16] Group 5: Investment Outlook - Crocs, Academy Sports, and Universal Display are identified as high-conviction investment ideas for 2025, with expectations of strong performance and low downside risk [18] - Despite potential underperformance in the short term, the long-term outlook for these companies remains positive [19]