He also liked Lululemon Athletica (LULU). People who say the consumer is dead are wrong, Najarian said.

The Real Story Wrap: November 12: Stocks in the U.S. got walloped Wednesday, closing with discouraging losses after Treasury Secretary Henry Paulson proposed new ways to spend the Troubled Asset Relief Program's remaining funds, retailers offered cringe-worthy sales forecasts and Congress looked at a potential bailout for the sickly auto sector.
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made the biggest return

Cramer: Crocs Is Over:
Jim Cramer tells investors to get out of Crocs immediately, if not sooner.

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Under Armour Brings in a Ringer: kristin Bentz, The Talented Blonde, explains why David McCreight's appointment as president is good for the performance athletic brand.


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Merrill Upgrades Lululemon, American Eagle:
Kristin Bentz and Simon Constable discuss rating changes on soft-line retailers Lululemon, American Eagle and Tween Brands, and special guest David Ranson explains why speculators are not to blame for oil's surge.

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Align Your Stock Chakras With These Retail Buys: Kristin Bentz, The Talented Blonde, shows you how to play retailers' yoga-apparel frenzy in today's 'Random Acts of Fashion.'
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Action in this stock is similar to what we saw in UnderArmour and Crocs about 6 months ago, reveals Najarian.

But Lululemon shares (ticker: LULU) face some worries, not least that much of the company's growth appears to come from the Canadian dollar's strength -- perhaps transient -- against the greenback; a company filing last week said currency gains of $17.6 million accounted for 14% of its revenue gain last year, equivalent to about 35% of its operating profit. The faltering U.S. retail environment can't be good news for sellers of high-priced yoga gear. And last year, the New York Times tested a shirt from Lululemon's VitaSea line, supposedly made from seaweed to release minerals and vitamins into the skin. The test found no significant difference in mineral levels between VitaSea and a (presumably cheaper) cotton T-shirt, and "no evidence of seaweed." Lululemon founder and head designer Chip Wilson conceded to the Times he couldn't dispute the findings. Lululemon insists that earnings are driven by sales gains to a "growing community" of health-conscious Americans unfazed by a slowing economy, and that retailing's woes are helping the company find better locations. As for VitaSea, Lululemon says it stands behind the labeling of all its products. But it's hardly comforting that CEO Robert Meers plans to retire in June, to be replaced by Christine Day, a Starbucks alumna who joined management only in January. In February, the chief operating officer resigned. And management last week disclosed its intention to register the sale after July 26 of up to 21 million shares held by insiders. There are now 75 million shares outstanding.

I'll never understand why people will ever pay 200 times earnings for anything - seaweed in the clothes - give me a break

Can't profitably expand at a fast enough rate to justify valuation.

Remember, these are least favorites, not "Hated Stocks." I don't see enough store openings to generate the growth needed for this valuation.