Under Armour Stock Recovery: What Prem Watsa's Bold 560% Portfolio Increase Really Signals

SchrödingersNode · 2026-01-20T17:10:07+00:00

Prem Watsa's substantial investment in Under Armour signifies confidence in its undervalued potential amid ongoing struggles. The brand's focus on cost management hints at recovery, although execution risks remain. Investors should view this as a long-term opportunity rather than a quick win.

SchrödingersNode

2026-01-20 17:10:07

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A Calculated Bet from Canada’s Investment Legend

When Prem Watsa—often dubbed the “Warren Buffett of Canada”—makes a move, seasoned investors start asking questions. His recent decision to dramatically increase Fairfax Financial Holdings’ stake in Under Armour Inc (NYSE: UA) by over 560% is no exception. This isn’t a reactive trade or a speculative gamble; it’s a deliberate positioning that suggests Watsa sees something others have overlooked.

The Real Message Behind the Numbers

The scale tells you everything. By making Under Armour nearly a tenth of Fairfax’s portfolio, Watsa is essentially saying: “I believe the risk-reward equation has shifted.” This isn’t how value investors behave when chasing momentum. Instead, it reflects conviction that the company is genuinely undervalued with limited downside exposure.

Long-term turnaround plays are Watsa’s specialty. He doesn’t chase headlines or quarterly beats; he accumulates when structural improvements are quietly taking root but market sentiment hasn’t caught up.

Where Under Armour’s Opportunity Lies

Strip away the noise, and Under Armour’s operational trajectory has shifted meaningfully. The company has been executing disciplined cost management: cutting bloated inventory, exiting low-margin markets, and refocusing on performance-oriented apparel rather than fashion chasing.

Revenue may not be surging, but balance sheet strengthening combined with margin protection is exactly what attracts patient capital. These aren’t flashy headlines—they’re the foundation of recovery.

The Execution Risk Nobody Should Ignore

Let’s be honest: Under Armour’s comeback remains incomplete. The brand still battles established competitors, consumer preferences remain fluid, and profitability margins face persistent pressure. Having a marquee investor aboard improves credibility, but it doesn’t eliminate execution risk. Stock volatility should be expected throughout the turnaround.

What Investors Actually Need to Know

Under Armour (UA) Stock Snapshot

Symbol: UA
Company: Under Armour Inc
Current Price: $5.26
Change: +1.94%

Watsa’s position doesn’t guarantee UA’s immediate breakout. The real question for investors isn’t whether the stock rallies tomorrow, but whether this represents the early stage of a multi-year recovery. For value-oriented portfolios, that distinction matters more than short-term price action.

The fact that someone with Watsa’s track record is willing to deploy significant capital suggests the floor may be firmer than it appears.

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