Apple Has Nothing on Nike's (NKE) Swoosh
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Price: $41.73 -0.22%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 3.5%
Revenue Growth %: -2.2%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 3.5%
Revenue Growth %: -2.2%
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Want to know how to value a company? Simple: skip the technical analysis, modeling, and forecasts, and look at the basics.
Starting with demand.
That key element has propelled Nike (NYSE: NKE) to perpetual new highs in its stock price. With it's new offering of Air Jordan-branded shoes, Nike has been able to mimic Apple (Nasdaq: AAPL) in the demand aisle: customers lining-up around the block to be the first to get their wares.
Recently, the WSJ highlighted this phenomenon. Wednesday, the WSJ observed that there was a line forming at a Foot Locker in New York, which was about 100 strong for the Jordan Retro 11 Concord, which retailed for $180. Though shoes didn't show up late, that didn't deter buyers.
An immediate difference that one might point out is the purpose of the people in line. For Apple, folks literally want to be the first to get their hands on the latest-and-greatest in technology, whether it'd be a phone, tablet, or notebook. Apple's attention to detail with regard to consumer experience, product reliability, and great support system have nurtured this growth into what it is today. The results have been reflected in Apple's share price, and in investors brokerage accounts.
With Nike, the crowd might be a little different. Customers might simply want to buy the shoe, turn around, and sell it on eBay (Nasdaq: EBAY), craigslist, or some other outlet for double, triple, or even more of the original price paid. Capitalism at its finest. However, there are those that see value in what this particular shoe is offering. The chance to hold the namesake of a legend, with limited amounts being offered. There will be no next Jordan Retro 11 Concord, and this is intriguing.
But like Apple, there's more to the story. Nike is an innovator in its field. One prime example would be the World Cup in 2010. Those tuning in would have seen players sporting neon yellow, green, purple, white...all adorned with a bright orange Nike swoosh. The players loved them because it showed a unique style, and Nike loved them for the advertising.
That has carried over into more mainstream U.S. sports like football, baseball, and basketball.
Nike is also known for great advertisements. Just a few weeks ago, we highlighted a call by Jim Cramer, and noted Nike's ads. There isn't one time in the past ten years that Nike hasn't evoked an emotion to do better, try harder, dig deeper, and push ahead. Even it's simple "Just do it" slogan was the inspiration for plenty of patients with life-threatening illnesses to beat the disease.
Those people weren't looking to win on the turf, in the water, or down the side of a mountain. Their game was life, the illness the opponent, and survival the victory.
Apple does a similar thing with people (though maybe not as far as pushing one to beat an illness). It has built up a fan base, like it or not, which has adapted and integrated Apple into their lives. Devices are solid, innovative, and reliable. If your device doesn't perform to standard, go to the Apple store and an employee will most likely fix it for you at no cost, of give you a replacement on the spot.
For a multibillion dollar international tech and media giant, which sells hundreds of thousands of devices per day, that's pretty special.
The point is, there are few companies like Nike or Apple out there, who are similar and yet so different. Both are leaders in their field, fending off the competition, and will continue to do so as long as the boat points forward.
Nike has proven to be a winner over 40+ years of business, and future orders increasing 13 percent through April all but confirm confidence retailers have in them. With the Olympics, basketball, and World Cup 2014 all great near-term catalysts, the sky appears to be the limit for Nike.
Or maybe that's too constrictive.
Should a concern be made that Nike is trading near all-time highs? Probably not, or else you might've been scared out of Nike several "all-time highs" ago. Shares are off 0.3 percent heading into the close.
Starting with demand.
That key element has propelled Nike (NYSE: NKE) to perpetual new highs in its stock price. With it's new offering of Air Jordan-branded shoes, Nike has been able to mimic Apple (Nasdaq: AAPL) in the demand aisle: customers lining-up around the block to be the first to get their wares.
Recently, the WSJ highlighted this phenomenon. Wednesday, the WSJ observed that there was a line forming at a Foot Locker in New York, which was about 100 strong for the Jordan Retro 11 Concord, which retailed for $180. Though shoes didn't show up late, that didn't deter buyers.
An immediate difference that one might point out is the purpose of the people in line. For Apple, folks literally want to be the first to get their hands on the latest-and-greatest in technology, whether it'd be a phone, tablet, or notebook. Apple's attention to detail with regard to consumer experience, product reliability, and great support system have nurtured this growth into what it is today. The results have been reflected in Apple's share price, and in investors brokerage accounts.
With Nike, the crowd might be a little different. Customers might simply want to buy the shoe, turn around, and sell it on eBay (Nasdaq: EBAY), craigslist, or some other outlet for double, triple, or even more of the original price paid. Capitalism at its finest. However, there are those that see value in what this particular shoe is offering. The chance to hold the namesake of a legend, with limited amounts being offered. There will be no next Jordan Retro 11 Concord, and this is intriguing.
But like Apple, there's more to the story. Nike is an innovator in its field. One prime example would be the World Cup in 2010. Those tuning in would have seen players sporting neon yellow, green, purple, white...all adorned with a bright orange Nike swoosh. The players loved them because it showed a unique style, and Nike loved them for the advertising.
That has carried over into more mainstream U.S. sports like football, baseball, and basketball.
Nike is also known for great advertisements. Just a few weeks ago, we highlighted a call by Jim Cramer, and noted Nike's ads. There isn't one time in the past ten years that Nike hasn't evoked an emotion to do better, try harder, dig deeper, and push ahead. Even it's simple "Just do it" slogan was the inspiration for plenty of patients with life-threatening illnesses to beat the disease.
Those people weren't looking to win on the turf, in the water, or down the side of a mountain. Their game was life, the illness the opponent, and survival the victory.
Apple does a similar thing with people (though maybe not as far as pushing one to beat an illness). It has built up a fan base, like it or not, which has adapted and integrated Apple into their lives. Devices are solid, innovative, and reliable. If your device doesn't perform to standard, go to the Apple store and an employee will most likely fix it for you at no cost, of give you a replacement on the spot.
For a multibillion dollar international tech and media giant, which sells hundreds of thousands of devices per day, that's pretty special.
The point is, there are few companies like Nike or Apple out there, who are similar and yet so different. Both are leaders in their field, fending off the competition, and will continue to do so as long as the boat points forward.
Nike has proven to be a winner over 40+ years of business, and future orders increasing 13 percent through April all but confirm confidence retailers have in them. With the Olympics, basketball, and World Cup 2014 all great near-term catalysts, the sky appears to be the limit for Nike.
Or maybe that's too constrictive.
Should a concern be made that Nike is trading near all-time highs? Probably not, or else you might've been scared out of Nike several "all-time highs" ago. Shares are off 0.3 percent heading into the close.
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