Recommendation: Buy Nike (NKE)
Key Investment Points
• High-growth, significant upcoming opportunities
• Unfairly discounted valuation following company turnaround
• Spin off of ABC division will unlock value
• Industry competitive dynamics
• Are products commoditized? Monopoly? ASP going down due
to competition? (Impact on profit margins)
• Industry demand drivers
• What causes customers to buy this company’s product?
• Industry trends
• What kind of shifts in demand are occurring (and what impact
on top, bottom line)?
• E.g. consumer preference for higher-margin green alternatives
• Growth outlook
• What are the key metrics of this industry?
Nike (NKE) Company Profile
• Business profile – How does this company generate revenue?
• International vs. domestic
• Growth/earnings outlook
• Management quality
• Length of tenure doesn’t equal experience or quality
• Is management shareholder friendly? Honest? Can they
• Competitive landscape, product positioning
• Does company have a sustainable competitive advantage?
Prev Close: 61.03
1y Target Est: 71.40
52wk Range: 51.50 - 67.93
Avg Vol (3m): 3,820,250
Market Cap: 29.68B
P/E (ttm): 17.69
EPS (ttm): 3.376
Div & Yield: 0.92 (1.50%)
3 Year Price Graph (Morningstar) Forward P/E:
SWOT analysis, and how each point impacts company EPS/valuation multiple
Uniqueness of Products Dependence on Demand for
Globalization Products in Sales& Marketing
Strive for continuous Foot Locker- significant
Improvement Customer ( over 10%)
Strong Research & Futures Ordering Program
Development Transportation Costs
Competitive Advantage in International Operations and
sponsoring athletes Trade
Research& Development Competition
Trademarks Dependence on Innovation
Cost Efficient Marketing Dependence on high quality
Olympic Games in China endorsers of their products
• In one sentence, answer the question: Why should we own
this stock now?
• Why overweight?
• Key value drivers
• Potential Catalysts
• Key questions
• Key risks
Portfolio Placement / Recommendation
Sector : Consumer Discretionary
Industry Group: Retailing
Current Holdings: ZUMZ, VCR
Target Sector Allocation: 7%, $24,772
Current Sector Allocation: 2.24% , $7,927
Remaining Allocation: 4.76%, $16,845
BUY 130 shares of NKE at Market Price (approx.
$8,000, 2.26% of portfolio)
Holding Period/Exit Strategy: 2-3 years, Consider selling
if stock price rises above $80 or below $40 or if
fundamentals change dramatically