Nike designs, develops, and markets high quality footwear,
apparel, equipment, and accessory products. Nike is the largest
seller of athletic apparel in the world. The company sells its
products to approximately 19,000 retail accounts in the United
States and through a mix of independent distributors, licensees
and subsidiaries in approximately 140 countries around the world.
Virtually all of its products are manufactured by independent
contractors. Most footwear products are produced outside the
United States, while apparel products are produced both in the
United States and abroad.
Nike's athletic footwear products are designed primarily for
specific athletic use, although a large percentage of the
products are worn for casual or leisure purposes. Nike places
considerable emphasis on high quality construction and innovative
design. Running, basketball, children's, cross-training and
women's shoes are currently its top-selling product categories
and the company expects them to continue to lead in product sales
in the near future.
Reasons To Invest
Shares of specialty footwear maker Nike have been running ahead
of the broader market recently. In fact, the stock has
outperformed both the S&P 500 and the Retail Sector Index (RLX.X)
since early March. We think the stock's bullish tendencies will
continue over the next six to nine months, which may make shares
of Nike a compelling investment consideration at current levels.
Along with the lower interest rates, Nike should be benefiting
from the recent weakness in the dollar. That's because Nike
exports a great deal of goods overseas, and as the dollar weakens
versus other currencies such as the euro and yen, Nike's products
become less expensive to those overseas consumers. If the
dollar continues sliding versus the euro and yen, shares of Nike
should continue to trade higher as the positive currency-related
ramifications (Read: Earnings) are factored into the stock price.
But even if the dollar stabilizes around its current levels,
overseas consumers should grow more emboldened.
In addition to the aforementioned currency catalyst, Nike should
also continue to benefit from the relatively stable U.S. consumer.
The resiliency of the domestic consumer during this economic
downturn continues to surprise many market participants, and for
that reason they are pouring capital into the shares of those
companies who benefit from a strong consumer such as Nike.
On the technical analysis front, shares of Nike recently traded
as high as the $50 level before pulling back on profit taking.
Investors who choose to enter this position over the next several
weeks can turn to the $50 level for further confirmation of the
stock's out performance. In other words, an advance above the
$50 level would confirm that Nike's out performing ways will
continue over the intermediate-term.
Shares to Qualify = n/a Accept Foreign Accounts: Yes
Auto-reinvestment = Yes Temper Enrollment Serv: Yes
Min/Max Investment = $50 to $250,000/year
Dividend: 5% to $3+3c/sh Cash: $5+3c/sh Auto ReInvest: $2+3c/sh
First Chicago Trust
Industry Group: Specialty Retail 52-week high=$60.06
Annual Dividend Per Share= $0.48 52-week low =$34.94
Last earnings 06/15 est=0.59 actual=0.60
Next earnings 09-17 est=0.71 versus=0.77
P/E = 23
Strong Buy = 3
Moderate Buy = 4
Hold = 4
Moderate Sell = 0
Strong Sell = 0