Polen Capital: “Adidas (ADDYY) Could Grow Earnings at a High Teens Rate From 2021-2025”

Polen Capital, an investment management firm, published its “Polen Global Growth” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of 7.08% was delivered by the fund for the fourth quarter of 2021, versus the MSCI All-Country World Index (the “Index”)’s return of 6.67% for the same period.  Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Polen Global Growth, in its Q4 2021 investor letter, mentioned adidas AG (NYSE: ADDYY) and discussed its stance on the firm. adidas AG is a Herzogenaurach, Germany-based design company with a $51.6 billion market capitalization. ADDYY delivered a -6.71% return since the beginning of the year, while its 12-month returns are down by -23.26%. The stock closed at $134.31 per share on February 16, 2022.

Here is what Polen Global Growth has to say about adidas AG in its Q4 2021 investor letter:

“Adidas shares declined during the quarter and was the largest detractor for the full year. The company has grappled with the ongoing pandemic and subsequent factory closures, especially in Vietnam where it sources a substantial portion of its production. As a result, higher sourcing costs and price cuts squeezed margins.

In addition, tighter lockdown restrictions in China may have impacted sales in the region, one of its largest markets. Nevertheless, Adidas has made a comeback in the U.S. with a rise in sales and has returned to growth in Europe, and near-term results indicate that Adidas is continuing to recover from the pandemic. We continue to focus on the next five years and applaud management for navigating a tough environment while simultaneously putting a strategy in place for 2025. We believe Adidas could grow earnings at a high teens rate from 2021-2025 after normalizing for the extremes of COVID.”

Our calculations show that adidas AG (NYSE: ADDYY) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. adidas AG (NYSE: ADDYY) delivered a -16.52% return in the past 3 months. In December 2021, we also shared another hedge fund’s views on ADDYY in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.