NIKE (NKE) is one of the most successful companies in the world. The company, as big as it is, continues to grow all over the planet at a double digit rate. It sells products in almost every country in the world and it's a well-known brand everywhere. In the last quarter the company's revenue was 5.7 billion dollars and the company earned 1 dollar per share. Nike is a company that does well regardless of the global economy because it's geographically diversified.
The company is committed to taking advantage of recent trends in order to maximize its revenues and earnings. For example, the company invests heavily in social networking and digital communication in order to promote its brand image and products on the internet. The company also uses these tools to receive feedback and suggestions from customers in order to improve its products.
The company focuses on what it calls the three crucial elements: "innovative products, brand strength, and premium distribution." I would say that Nike is committed to continue to focus on these three elements in 2012 and beyond.
The company sees a lot of growth potential in China, where its revenue grows by 25-30% every year. Nike improved its shipment and distributions in China and now its able to deliver products much faster, meaning its revenues will increase even more. The brand is particularly popular among Chinese youth. In China, the company's biggest concern is inflation, which is easing as we speak.
Recently, the company announced that there has been no drop in demand to company's products in the last month. The company expects the strong demand to continue in 2012 and beyond. Last week, the company's CEO, Mark Parker announced that the company's revenue was not impacted at all by the economic slowness experienced in some parts of the world. The company is expected to offset increasing material costs by increasing price of some of its products. The company faces some competition from Adidas (ADDDF.PK) but I don't see them as a threat.
In the last 52 weeks, the company has traded at between 69.43 and 102.00. It currently trades at 101.68 which is near its 52 week high. For long term investors, NKE is definitely a buy now. For short term investors, I suggest waiting until the stock has a correction and initiating a position afterwards. Any price below 90 dollars would be a good point to initiate a position for short term investors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
No comments:
Post a Comment