Nicholas Klemm

Occupation

Business student

The portfolio

Includes stocks in Lululemon Athletica Inc., Cerner Corp., Ziopharm Oncology Inc. and Boston Beer Co.. Inc..

The investor

Nicholas Klemm was gifted shares in a business when he was born. Throughout his youth, he followed its cost and kept a log in a diary. The ups and downs were intriguing: He started saving his money to spend on his own at 18 (which he did). Mr. Klemm is currently studying business administration at college and doing internships at bookkeeping and investment companies, while working on the executive of the campus investment center.

How he invests

Mr. Klemm likes to invest in undervalued companies, particularly companies valued less than their peers on the basis of evaluation metrics such as price-to-earnings and price-to-book ratios. “Usually, it’s because of missed earnings projections or a change in short term advice,” Mr. Klemm says. He’ll investigate and might buy shares if he gets a feeling that the setback is temporary.

This was the case with Lululemon Athletica Inc.. He purchased last spring, after the stock dropped by 25 percent in the aftermath of management’s downward revision in estimated earnings.

He considers Lululemon has established itself as a powerful brand name in the fitness market, which “is seeing continuing long-term growth{}” Investors don’t have “to fear them moving obsolete like an Abercrombie amp; Fitch or Hollister.”

“Lululemon has taken great strides to draw male customers using their ‘I love you man’ worker program,” he adds. “It gives employees $400 in reductions to pass onto their male friends. This is a excellent strategy that I think can help expand Lululemon’s male consumer base{}”

Best move

The rally in Lululemon inventory after he purchased was among his greatest gains, “particularly in this brief time.”

Worst move

Selling brewery Craft Brew Alliance Inc. too soon — its shares climbed 50 percent after he sold.

Advice

“Don’t get discouraged in the short term. Be patient.”

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Courtesy: The Globe And Mail