Nicholas Klemm
Nicholas Klemm
Occupation
Business student
The portfolio
Includes shares in Lululemon Athletica Inc., Cerner Corp., Ziopharm Oncology Inc. and Boston Beer Co. Inc.
The investor
Nicholas Klemm was gifted shares in a company when he was born. Throughout his childhood, he followed its price and kept a log in a journal. The ups and downs were fascinating: He began saving his money to invest on his own at 18 (which he did). Mr. Klemm is currently studying business administration at university and doing internships at accounting and investment firms, while serving on the executive of the campus investment club.
How he invests
Mr. Klemm likes to invest in undervalued companies, especially companies valued less than their peers on the basis of valuation metrics such as price-to-earnings and price-to-book ratios. "Usually, it is due to missed earnings projections or a change in short-term guidance," Mr. Klemm says. He'll investigate and may buy shares if he gets a sense that the setback is temporary.
Such was the case with Lululemon Athletica Inc. He bought last spring, after the stock fell by 25 per cent in the wake of management's downward revision in estimated earnings.
He believes Lululemon has established itself as a strong brand name in the fitness market, which "is seeing continued long-term growth." Investors do not have "to fear them going obsolete like an Abercrombie & Fitch or Hollister."
"Lululemon has also taken great strides to draw in male consumers with their 'I love you man' employee program," he adds. "It gives employees $400 in discounts to pass onto their male friends. This is a great strategy that I think will help grow Lululemon's male consumer base."
Best move
The rally in Lululemon stock after he bought was one of his best gains, "especially in such a short time."
Worst move
Selling brewery Craft Brew Alliance Inc. too soon – its shares climbed 50 per cent after he sold.
Advice
"Do not get discouraged in the short term. Be patient."
Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com