Under Armour Under Fire

Under Armour

Under Armour Chairman and CEO Kevin Plan sold 1.5 million shares last week for almost $90 million. Having sold 10% of his holding, the chief executive now holds a stake of nearly 26%, or 12.5 million shares in the sport apparel company.

Two of Under Armour's senior vice presidents, Kip Fulks and Scott Plank, also exhibited little faith in the company's future, selling 15,000 shares and 850,000 shares respectively last week.

Although the company did beat Wall Street expectations when it reported its third-quarter earnings on Oct. 30, the stock selloff by the CEO does cause some concern. Also, contrary to the consensus, Morgan Stanley has expressed concern regarding Under Armour's ability to "sustain margins while growing sales." Morgan Stanley recently downgraded the stock to an underweight rating.

Tuesday on CNBC's "Stop Trading" segment, Jim Cramer said this might be a good time to sell Under Armour shares. Cramer's comments added to the blow, sending the stock plummeting below $50. The company's stock has not traded below $50 since early July this year.

Under Armour has been one of the hot stocks over the last couple of years, and it is owned by successful funds, such as Cordillera Asset Management. Despite this and the fact that the share price is at a four-month low, the company's stock does not inspire too much confidence.

Sun Microsystems

I would also like to talk about Sun Microsystems, which has been repurchasing shares consistently and was upgraded by Citigroup in Tuesday's morning research note. On Monday, the server and software maker reported profits for its historically soft fiscal first quarter, citing strong sales of its high-end computers.

Although revenue growth failed to impress the market, the company managed to stay in the black for the first time since the dot-com bust for the full year, through tight cost control.

Citigroup upgraded Sun Microsystems two notches from sell to buy, citing its aggressive cost- and job-cutting efforts, share repurchases and improving product portfolio. Citigroup analyst Richard Gardner said the Santa Clara, Calif.-based company should report solid fiscal second-quarter results. Gardner also raised Sun's price target to $7.25 from $5.25.

The company repurchased shares worth $1.25 billion during the latest quarter, and it has another $1.55 billion remaining in its current authorization. Citigroup added that the company has "ample room for additional repurchase once the current authorization is exhausted."

With the stock down almost 10% Tuesday, the opportunity to buy JAVA appears inviting. However, growing revenue still seems to be Sun Microsystems' greatest challenge. Particularly concerning is that the company has not been able to stem its negative server unit growth over the last three quarters.

And another question that may make it difficult to grow server sales is competition from virtualization companies, such as VMware and Citrix's XenSource. That being said, I believe you have the opportunity to buy Sun Microsystems now as it continues to grow its profits and buys back its shares.

Two of the professional investors who own Sun Microsystems are Jacob Internet Fund (JAMFX) and T. Rowe Price Mid-Cap Value Fund (TRMCX).

Jacob Internet Fund (JAMFX) aims at keeping the fund balanced between growth plays and value plays, so that the fund's returns are more balanced. T. Rowe Price Mid-Cap Value Fund (TRMCX) has a Morningstar rating of five stars and usually invests at least 80% of its assets in companies with a market capitalization within the range of those listed in the S&P Mid-Cap 400 Index or the Russell Mid-Cap Value Index. Click here to see the rest of today's Top Insider Purchases & Buybacks portfolio on Stockpickr.