Nike Inc. (NYSE: NKE) is
a leading designer, marketer and distributor of athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned subsidiaries include Converse (athletic footwear, apparel, accessories), Cole Haan Holdings (luxury shoes, handbags, accessories, coats), Umbro (UK soccer brand) and Hurley International (action sports footwear, apparel, accessories). The firm is the world's #1 shoemaker. Its products are sold throughout the US and in more than 180 other countries.
The company pleased investors last month, when it reported fiscal Q3 EPS of 92 cents and revenues of $4.5 billion. Analysts had been expecting 81 cents and $4.3 billion. Revenue grew 20 percent or more in overseas markets, with particular strength in Asia and Europe. Company officials said Nike had already hit its goal of more than $1 billion in annual sales in China. McAdams, Wright, Ragen and UBS subsequently reiterated "buy" ratings on the stock.
Shares popped
on the news and have since consolidated the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. NKE appears to be making its move today.
Altogether, brokers recommend the issue with three "strong buys", nine "buys", three "holds" and one "underperform". The NKE P/E ratio (18.22), PEG ratio (1.36), Sales Growth rate (15.38%), EPS Growth rate (33.33%), Return on Assets (16.64%), Return on Investment (21.85%) and Return on Equity (25.32%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 72% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $51.50 and $70.60. A stop-loss of $59.75 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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