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NIKE. Presentation Outline. Snapshot Brief Overview Financial Statements Industry Comparison Current News Technical Analysis Trend Analysis Eval Summary of Valuations. Analysts Recommendations Risk Investment Recommendations. Snapshot. Brief Overview.

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Presentation Transcript
presentation outline
Presentation Outline
  • Snapshot
  • Brief Overview
  • Financial Statements
  • Industry Comparison
  • Current News
  • Technical Analysis
  • Trend Analysis
  • Eval
  • Summary of Valuations
  • Analysts Recommendations
  • Risk
  • Investment Recommendations
brief overview
Brief Overview
  • NIKE’s principal business activity is the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory product
  • The largest seller of athletic footwear and athletic apparel in the world
  • Distributed in over 160 countries around the world
  • Sell under the NIKE brand, wholly owned subsidiary Converse, Cole Haan, g Series, Bragano, Hurley, NIKE Hockey, and Exeter brands
  • Main competitors have joined with the recent announced acquisition of Reebok by Adidas
overview
Overview
  • Nike’s best year was last year.
  • The US accounts for 46% of revenues.
  • Market Cap doubled in 1 year, mostly due to the growth in US footwear sales.
  • Internet market share makes buying shoes easy.
  • No such thing as bad publicity.
financial statements
Financial Statements
  • Sales growth has consistently grown over the last four years
    • 4.3% in 02’ 8.1% in 03’ 14.5% in 04’ 12.1% in 05’
  • Increase in Gross Margin from 39%-45%, however this is not likely to continue to grow in future years
  • Red Flags…
current news
Current News
  • England just banned the use of a chemical that is used in the production of leather shoes. The affects on NIKE have yet to be determined.
  • Adidas announce its acquisition of Reebok. These are the two biggest competitors, who when combined, will be roughly the size of NIKE.
technical analysis
Technical Analysis

In the last Year…

  • Support level 76 dollars per share
  • Resistance level approximately 92 dollars a share
  • Last 5 years…
  • Support level at 39 dollars a share
technical analysis continued
Technical Analysis Continued…
  • In line with its 200 day moving average
  • Has tended to less volatility over the last 2-3 years
analysts recommendations
Analysts Recommendations
  • Analysts have a price target between 95-110 dollars depending on one or two year return
  • Consensus recommendation is OUTPERFORM
  • Mean rating is a 1.84, down from a 2.06 two months ago
nike risk
NIKE Risk
  • Risk Grade – 103 (Max 134)
  • Over 3/4 of all stocks available are more risky than NIKE
portfolio with nike
Portfolio with NIKE
  • Risk Grade of 60 vs. current risk grade of 62
  • An analysis of our current portfolio labels consumer discretionary as the most underweight sector compared to the benchmark
  • Interesting Facts:
    • Nike NEVER made an offer to buy Under Armor
    • They had Nike Shocks well before they were sold in store but decided to hold sale until Michael Jordon retired and his shoe line lost popularity
investment recommendations
Investment Recommendations
  • Positive: Company has strong potential if it can tap into the foreign markets (China and International Soccer). A purchase of 65 shares would account for 4.65% of the portfolio and would have a market value 5,382 dollars.
  • Negative:
    • Right now too much stress is put on the strength and growth of the US Footwear sector.
    • The abroad sector that is expected to grow contributes a low percentage of overall revenue. However, this does leave room for rapid growth and expansion.
    • The company has doubled its market cap. over the last five years and has seen a very wide trading range between 50 and 90 dollars.
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