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					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 Overview

• 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
   execute?

• Competitive landscape, product positioning

   • Does company have a sustainable competitive advantage?
Investment Information


                                      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
   SWOT analysis, and how each point impacts company EPS/valuation multiple

                       Strengths                   Weaknesses
            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
            Weak Dollar

                    Opportunities                     Threats
            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
Investment Thesis

• 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

				
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posted:8/30/2012
language:English
pages:8