Three Stock Darlings Down Over 30% That Are Worth Your Attention

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Ah, dear reader, if you find yourself wincing at the thought of parting with your hard-earned pounds for anything, much less a slice of the stock market pie, you are not alone. Fear not! It appears we have stumbled upon a splendidly opportune moment to rummage through the market’s proverbial attic in search of those delightful bargains that are just waiting to be unearthed. For let us face it: stock sell-offs can, at times, resemble the end of a rather disastrous soirée, but such dips often present enticing value propositions for long-term investors with a keen eye and a touch of patience.

However, dear Watson, a precipitous plummeting of stock prices should merely serve as our leaping-off point for further inquiry. One must don the detective’s hat and ascertain the subtler nuances behind such declines: what calamities have befallen management, and what measures are they undertaking to mend their commercial ship? Furthermore, we ought to consider whether the current winds of business are apt to shift in a favorable direction.

Now, without further ado, I present to you three household names, those stalwarts of the S&P 500, that find themselves down a rather lamentable 30% thus far this year. Yet, beneath this unseemly exterior lies a treasure trove of structural strengths and other catalysts that could handsomely reward those intrepid investors who remain steadfast in their resolve.

1. Lululemon Athletica

Much like a splendid soufflé that has sunk after a giddy ascent, Lululemon (LULU) has seen its shares quite literally halve from their all-time high late last year, strutting down the catwalk of the S&P 500 as one of its less fashionable attendees. Despite this rather undignified tumble, the brand remains a veritable darling, still profitable and chock-full of loyal followers. Alas! Investors have been spooked by whispers of tariffs, sluggish domestic growth, and the rise of competitors such as Nike, Adidas, and the delightful Athleta.

In a moment of candor during the first-quarter call with analysts, CEO Calvin McDonald thoughtfully acknowledged the role of tariffs, assuring stakeholders that Lululemon’s enviable margins and a cash-rich balance sheet-boasting a remarkable $1.3 billion and, rather ingeniously, no debt-grant the Vancouver-based retailer splendid financial armament. This resourcefulness allows for continued investments and the judicious management of tariff-related costs.

And whilst some may assert that this once-promising “downward dog” of a company has surely seen its best days during the pandemic’s work-from-home craze, my optimistic inclinations suggest there is still much promise laid forth. With a forward price-to-earnings ratio of a mere 13 times projected earnings-quite a bargain compared to the 40 times of yesteryears-there is room for the festive cheer of international expansion, particularly in the enigmatic realms of China and other untapped markets. There are whispers of renewed product innovation across the genders that could easily be facilitated by our dear friend, the debt-free balance sheet.

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Moreover, one must not overlook an aggressive ongoing share repurchase program-a veritable trump card that signals management’s astute belief regarding the stock’s undervaluation, which could well boost our earnings per share in a rather agreeable manner.

2. Deckers Outdoor

Speaking of entities that find themselves misplaced among the lower rungs of market valuation, Deckers Outdoor (DECK) is currently trading approximately 50% below its former glories, having hit an all-time high in the wintry month of January. However, a peek through the keyhole reveals a business thriving, as indicated by its latest fiscal Q1 results released on the 24th of July.

According to the ever-eloquent CEO Stefano Caroti, Hoka has enjoyed its most successful quarter to date, and together with the ever-popular Ugg, the company has managed to not only meet but exceed expectations thanks to both market share increments and hearty full-price sales. Ain’t that a dash of good news? Revenue has swelled by 17% year-over-year, sporting nearly 50% growth in international sales-enough to make one feel positively giddy, offsetting any domestic sluggishness.

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To the value-minded investors among us, the tableau of opportunity is nothing short of compelling: Deckers boasts a debt-free status, an impressive cash cache of $1.7 billion, and robust free cash flow. The astute CFO Steven Fasching, whilst discussing the implications of tariffs, calculated a potential $185 million impact should product rates from Vietnam double-a figure decidedly more manageable than many would anticipate. He even reassured investors that the order book remained unruffled by recent price hikes. Contrast this buoyancy with the market’s rather gloomy perception, and one might very well find an exquisite chance to embrace a high-quality purveyor of footwear and accessories at what could very well be a temporary markdown.

3. CarMax

Permit me to veer into a verbose analogy: imagine if someone were to proffer you a chance to acquire a piece of a company that eclipses all others in secondhand car sales and yet is offering its wares at a 35% discount. Would you, dear reader, not find yourself avidly reaching for your pocketbook? I am, of course, alluding to CarMax (KMX), the U.S. leader in used vehicle sales, presently grappling with a rather dampened stock price, down roughly 30% year-to-date due to the malaise of the sluggish used-car market, which is itself suffering from inflation-like prices and interest rates, a tightening of consumer credit, and a softening of demand-an unpleasant cocktail indeed for the proud purveyor.

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Yet, CEO Bill Nash assures us, during the noble Q1 earnings release, that the intellectual synergy of their store mix, technology, and an apposite digital presence remains a key distinguishing point in this vast and fractured market. He boldly proclaims that these factors will “drive sales, gain market share, and deliver significant year-over-year earnings growth for years to come.” But of course, the true tale is what occurs when the cycle dares to turn its mischievous head. While Q1 saw costs up by a modest 3.3%, the improvement in selling, general, and administrative costs as a percentage of gross profit worked wonders, declining from 80.6% to 73.8%-mostly thanks to an uptick in sales at existing venues.

Should interest rates descend and consumer confidence rise, one might be pleasantly surprised by the earnings potential of CarMax-transforming today’s markdown into a rather attractive proposition for astute investors with an eye for the long game.

Beaten-Down Stocks Worth Looking At

Indeed, the turmoil generated by sell-offs can be a quite unsettling experience, akin to observing a cat slip on a polished floor, but they equally serve as springboards into value-rich territory for those of us with a penchant for sagacity. Like their fellow consumer-driven entities, Lululemon, Deckers, and CarMax find themselves wrestling with challenges that have weighed heavily upon their stock performances. And yet, it remains crystal clear they possess the brand resilience and growth potential necessary to rebound splendidly. Investing in quality at a discount may require some patience, but history has consistently demonstrated that such a strategy is among the market’s finest-like discovering the last biscuit in the tin, as it were-when one least expects it. 🥳

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2025-08-21 23:25