Nike designs,
develops and markets an extensive line of footwear, apparel, equipment and
accessory products for athletic and leisure activities in over 190
countries. Over the past ten years the
company has generated a 19-25% return on equity, growing earnings and dividends
15-19% annually. This premier company
should continue to generate above average profit growth as a result of:
(1) its strong
portfolio of globally recognized brands provides a competitive advantage,
(2) increased
market share as a result of continued product line expansion in emerging
markets and non-Nike brands [Cole Haan, Converse, Chuck Taylor, Hurley and
Umbro],
(3) expanding
into emerging markets,
(4) stock buyback
program.
Negatives:
(1) its
customers are sensitive to economic conditions,
(2) intense
competition,
(3) most of its
manufacturing is overseas, thereby exposing it to local political/ economic/social
as well as currency risks.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 1.0 14* 20 NA
Debt/ EPS Down Net Value Line
Equity
ROE Since 2004 Margin Rating
Ind Ave 15 16 NA 7 NA
*over one half of the companies
in NKE ’s industry don’t pay a
dividend
Chart
Note:
NKE stock made great progress off its March 2009 low, quickly surpassing the
downtrend off its June 2008 high (straight red line) and the November 2008
trading high (green line). Long term the stock is in an uptrend (blue
lines). Intermediate term, it is in an uptrend
(purple lines). The wiggly red line is
the 50 day moving average. The Dividend
Growth Portfolio owns a 50% position in NKE, having Sold Half in late
2013. The upper boundary of its Buy
Value Range is $40; the lower boundary of its Sell Half Range is $76.
7/14
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