|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||150.32 - 151.58|
|52 Week Range||101.48 - 165.01|
|Beta (3Y Monthly)||0.61|
|PE Ratio (TTM)||33.98|
|Forward Dividend & Yield||1.88 (1.23%)|
|1y Target Est||224.88|
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...
(Bloomberg Opinion) -- The California Assembly has 61 Democrats and 18 Republicans. The California Senate has 29 Democrats and 11 Republicans. As with everywhere else in the U.S., the two parties are divided on most issues, from regulating the gig economy to limiting gun purchases. But there is one issue on which both Democrats and Republicans in California are aligned: paying, at long last, college athletes.(5)On Monday, a bill that would override the “amateurism” rules of the National Collegiate Athletic Association and give athletes at the major California universities the right to capitalize financially on their name, likeness and image passed the Assembly by a vote of 72-0. Then, on Wednesday, the state senate passed the Fair Pay to Play Act, which allows athletes to market themselves for things like personal sponsorships, endorsements, and video-game licensing, by a margin of 39-0. Not a single dissent! I still can’t quite believe it.There have always been a few lonely voices calling for the athletes who play college football and basketball -- the revenue sports, as they’re called -- to be paid. One such person, believe it or not, was Walter Byers, the man who ran the NCAA from 1951 to 1987. In retirement, he turned against the amateurism rules he had long enforced, describing them (correctly) as the means by which the college sports cartel avoided paying its labor force.Another was Sonny Vaccaro, who did as much as anyone to commercialize college sports; he marketed basketball sneakers for Nike, Adidas and Reebok before quitting to fight the NCAA. His beef was that it was wrong for everyone involved in college sports to be making money except the players.But until recently, those voices went largely unheard. Most people -- even ardent fans -- ignored the question of whether college athletes were being exploited. If they got angry at the NCAA it wasn’t because of its cartel-like nature, or the harshness of its bylaws. It was usually because the school they cheered for was being punished “unfairly” for violating some rule or other. (Fans always think their university is being punished unfairly.)Then, in 2009, the former UCLA basketball star, Ed O’Bannon, sued the NCAA after seeing his avatar in a video game -- and realized that the video game company was paying the NCAA for the rights to his image instead of him. Two years later, Taylor Branch wrote his ground-breaking article in The Atlantic, “The Shame of College Sports.” It included this memorable line: “The tragedy at the heart of college sports is not that some college athlete are getting paid” -- under the table, he meant -- “but that more of them are not.”The coastal elites started paying attention.I jumped in a few month later, after doing some research that convinced me that the exploitation of basketball and football players at big-time college programs was unconscionable. “Frontline” did a documentary about exploited athletes, “Money and March Madness.” Sports columnists began regularly taking the NCAA to task. The issue was rising to the surface.When the O’Bannon case went to trial in June 2014, it was widely covered in the media and the NCAA did not come off well. (Charles Pierce, writing in Grantland, described the NCAA’s arguments as “the threadbare piety in which it wraps its heedless commercialism.”) It ended with both the trial judge and the appeals court agreeing that the NCAA’s rules outlining and defining amateur athletics amounted to an antitrust violation. But sadly, the appeals court bought the NCAA’s argument that amateurism was what differentiated college sports from professional sports, so the remedies it allowed did nothing to overturn the status quo.The unanimous vote in favor of the Fair Pay to Play Act shows just how far we’ve come since then. It’s a little like marriage equality. For years, public opinion moved an inch at a time -- and then all at once, it seemed, two-thirds of the country supported it.California State Senator Nancy Skinner, the sponsor of the bill, is a perfect example of how people have come around. In November 2015, she heard the economist Andy Schwarz speak at a Rotary Club meeting in Oakland. Schwarz has been fighting the NCAA since 2004; he was one of the people who helped gin up the O’Bannon case. He can be absolutely withering about the NCAA cartel.As Skinner listened to him, she later told the New York Times:All of a sudden the light bulb went off. Rather than being the bystander going, “Gosh this is so unfair, how do these people get away with this?” I’m like, “Hey, if I’m in the Senate, can the state do something about it?”She also framed the issue in exactly the way critics like Schwarz and Vaccaro have all these years: “I don’t know of any other industry that can rely on a large set of people’s talent for which they deny them any earnings and all compensation.”The bill embraces what’s called the Olympic model. Olympic athletes aren’t paid directly for competing, but they are allowed to accept money from endorsements, sponsorships, autographs, and the like. Skinner’s bill gives athletes at the big California universities the same ability, overriding NCAA bylaws that forbid such payments. It’s not everything. Athletes who lack the star power to reap endorsement money will still be unable to capture their economic value to a university. But it’s a start.Or perhaps I should say, it might be a start. You see, assuming the bill is signed into law by Governor Gavin Newsom, it won’t take effect until 2023. That would give the NCAA and the affected California universities plenty of time to sue to have it overturned.Absurdly, the NCAA says that the bill is “unconstitutional,” because it “would remove that essential element of fairness and equal treatment that forms the bedrock of college sports.” In a letter to Newsom, the NCAA also claimed that if California athletes are allowed “an unrestricted name, image and likeness scheme” it will put every other Division 1 university at a disadvantage.I’m not so sure about that. For one thing, Schwarz has co-founded the Historical Basketball League, an eight team league that will pay college-age basketball players upwards of $150,000 a year before they enter the pros. Its first year of operation will be 2020, and if it’s even mildly successful in drawing top high school players away from college basketball it will put enormous pressure on the NCAA’s amateurism model.For another thing, California is unlikely to be the only state to pass a law similar to the Fair Pay to Play Act. Earlier this year, Washington State considered similar legislation, which will likely go forward now that California has led the way. I imagine by 2023 ten or 15 states might have their own version of the law – at which point the move to give athletes their economic rights, the same rights as any other American, could turn into a stampede.Yes, the winds of change are blowing. What the California bill suggests most of all is that the days when the NCAA could hold back progress are finally coming to an end.(1) The more common term, of course, is “student athlete,” but I avoid it at all costs. It is an Orwellian phrase, devised by the NCAA in the 1950s to avoid having to pay workers’ compensation to injured football players.To contact the author of this story: Joe Nocera at email@example.comTo contact the editor responsible for this story: Timothy L. O'Brien at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Nike (NKE) is set to release its Q1 2020 earnings and revenue results on September 24. Is now the time to buy NKE stock amid Lululemon (LULU) & Adidas (ADDYY) competition?
Breaking down Lululemon's (LULU) Q2 2019 financial results that wowed Wall Street last week. And why Lulu stock looks like a buy as it expands its digital, international, and menswear businesses to further challenge Nike (NKE) - Full-Court Finance.
(Bloomberg) -- Apple Inc. and manufacturing partner Foxconn violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory, the companies confirmed following a report that also alleged harsh working conditions.The claims came from China Labor Watch, which issued the report ahead of an Apple event on Tuesday to announce new iPhones. The non-profit advocacy group investigates conditions in Chinese factories, and says it has uncovered other alleged labor rights violations by Apple partners in the past.For its latest report, CLW said undercover investigators worked in Foxconn’s Zhengzhou plant in China, including one who was employed there for four years. One of the main findings: Temporary staff, known as dispatch workers, made up about 50% the workforce in August. Chinese labor law stipulates a maximum of 10%, CLW noted.Apple said that, after conducting an investigation, it found the “percentage of dispatch workers exceeded our standards” and that it is “working closely with Foxconn to resolve this issue.” It added that when it finds issues, it works with suppliers to “take immediate corrective action.” Foxconn Technology Group also confirmed the dispatch worker violation following an operational review.Apple’s supply chain has faced criticism over poor labor standards for years, and the company has pushed manufacturing partners to improve factory conditions or risk losing business. However, suppliers and assemblers are always trying to churn out more handsets. Foxconn, officially known as Hon Hai Precision Industry Co., hires tens of thousands of temporary workers to ramp up production and meet iPhone demand during the key holiday season each year.“Our recent findings on working conditions at Zhengzhou Foxconn highlights several issues which are in violation of Apple’s own code of conduct,” CLW wrote in its report. “Apple has the responsibility and capacity to make fundamental improvements to the working conditions along its supply chain, however, Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers.”CLW was founded in 2000 as a 501(c)(3) organization to investigate Chinese factories that make toys, shoes, electronics and other products for some of the world’s largest multinational companies. It has an office in New York City and one in Shenzhen that offers a hotline for factory workers in China, according to its website.While its report said 55% of factory staff were dispatch workers in 2018, and about 50% in August, this included student interns. Because many of these students returned to school at the end of August, that number is now closer to 30%, which is still a violation, according to CLW.“We believe everyone in our supply chain should be treated with dignity and respect,” Apple also said in a statement. “To make sure our high standards are being adhered to, we have robust management systems in place beginning with training on workplace rights, on-site worker interviews, anonymous grievance channels and ongoing audits.”Foxconn said it found “evidence that the use of dispatch workers and the number of hours of overtime work carried out by employees, which we have confirmed was always voluntary, was not consistent with company guidelines.”It added that its “work to address the issues identified in our Zhengzhou facility continues and we will closely monitor the situation. We will not hesitate to take any additional steps that might be required to meet the high standards we set for our operations.”Apple releases an annual supplier responsibility report that details working conditions in its supply chain. In its latest report, Apple said it conducted 44,000 interviews with supplier employees last year to check if they were properly trained and knew how to voice concerns, while taking new steps to prevent forced labor.In late 2017, Apple found Foxconn had employed high school students who worked illegal overtime to assemble the iPhone X. Apple sent specialists to the facility to work with management on systems that ensured appropriate standards were followed.Foxconn is the largest of a coterie of gadget assemblers that produce most of the world’s consumer electronics from sprawling Chinese bases. Typically operating on wafer-thin margins, they employ millions of mostly migrant and temporary workers because activity tends to wax and wane with shopping seasons and fluctuations in demand.Dispatch workers don’t receive benefits that full-time employees get, such as paid sick leave, paid vacations and social insurance, which provides medical, unemployment and pension coverage, according to CLW. While base wages can be higher for dispatch workers, they are paid by third-party firms on a short-term basis and are not employed directly by Foxconn, CLW says. Dispatch workers can become official factory workers after an initial three-month period, according to the group’s report.Last month, Foxconn said it fired two executives at one of its Chinese plants after another CLW investigation found the company was relying heavily on temporary workers and teenage interns to assemble Amazon.com Inc. Echo speakers. Foxconn reviewed the Hengyang facility and found the proportion of contract workers and student interns had on occasion exceeded legal thresholds, and that some interns had been allowed to work overtime or nights.The group, which also monitors conditions in myriad industries from apparel to retail, has run reports in the past on suppliers to the likes of Nike Inc. and Adidas AG and, recently, probed a factory that manufactured Ivanka Trump-branded shoes.Apple and Foxconn seek to produce about 12,000 iPhones per shift at the Zhengzhou factory, CLW’s latest report found. Last year’s iPhone XS models were more complex to build than the iPhone X, requiring more workers, the group also said.According to emails seen by Bloomberg, Apple told CLW in August that it was looking into the findings and had questions about the report. The company sent an investigator to the factory and met with Foxconn officials to discuss the heavy use of dispatch workers, but Apple and Foxconn are still allowing the activity despite violating the 10% standard, CLW said.The CLW report also detailed other findings, such as:During peak production periods, resignations are not approved.Some dispatch workers have not received promised bonuses.Student workers do overtime during peak production season, even though regulations on student internships prohibit this.Some workers put in at least 100 overtime hours each month, during busy production periods. Chinese labor law limits monthly overtime to 36 hours.Workers must get approval to not do overtime. If requests are denied and staff still choose not to work overtime, they are admonished by managers and miss out on future overtime opportunities.Workers sometimes have to stay at the factory for unpaid meetings at night.The factory doesn’t provide adequate protective equipment for staff.Work injuries are not reported by the factory, and verbal abuse is common there.While overtime is allegedly often required, most workers want to work overtime to make more money, according to an anonymous diary written by a CLW investigator in the factory.“We looked into the claims by China Labor Watch and most of the allegations are false,” Apple said. “We have confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary and there was no evidence of forced labor.”Apple added that less than 1% of workers were student workers, and that a small percentage of them voluntarily worked overtime or night shifts. Apple and Foxconn both said this issue has been corrected.Most factory workers are paid about 4,000 yuan ($562) a month, one CLW investigator found. After taxes and mandatory fees, they get roughly 3,000 yuan a month, according to the CLW report.China’s per capita disposable income was 28,228 yuan in 2018, or 2,352 yuan a month, China Daily reported earlier this year, citing government data.(Updates with detail on the group from the 7th paragraph)\--With assistance from Debby Wu.To contact the reporter on this story: Mark Gurman in San Francisco at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Alistair Barr, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
Reducing virgin plastic waste has been one of the most popular corporate sustainability efforts made by public companies in recent years. Adidas AG (ADR) (OTC: ADDYY) has long been recognized as a leader in corporate sustainability and has announced its plan to eliminate virgin plastic use from its products by 2024. The company also partnered with Parley for the Oceans in 2015, an environmental organization that raises awareness for the beauty and fragility of the oceans and enacts strategies to end their destruction.
Though earnings season is over, investors will be paying close attention to athleisure giant Lululemon when it releases quarterly results after the market close Thursday.
Lululemon is a groundbreaking fashion innovator that is going to continue to grow with the athleisure revolution but is it a good buy? Thursday evening's report should validate or reject LULU's high valuation.
Welcome to the latest episode of the Full-Court Finance podcast where Associate Stock Strategist Ben Rains dives into everything investors need to know about Lululemon (LULU) stock before the company reports its Q2 earnings results on Thursday...
The athletic-apparel industry obtains a lot of its product from China. As a result, U.S. athletic-apparel companies find themselves at the epicenter of the U.S.-China trade war. Thus, it should be no surprise that, as this trade war has heated up over the past month, Nike (NYSE:NKE) stock has been down slightly, since NKE is a leading athletic-apparel maker.Source: Shutterstock But, amid this trade-inspired weakness, the bull thesis on Nike stock has become quite compelling. That bull thesis is pretty simple. There are two parts to it.First, all the concerns which have hurt NKE stock over the past month are underappreciated. Second, the favorable fundamentals which have pushed Nike stock higher over the past several years are underappreciated.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, when it comes to Nike stock, the near-term negative factors are being exaggerated, and the long-term positives are being underappreciated. That combination won't last long. As long as it does, though, it is giving investors a compelling opportunity to buy a high-quality growth stock at a cheap price. * 7 Stocks to Buy Down 10% in the Past Week As a result, investors should buy Nike stock on its recent weakness. The Negative Factors Are Being OverstatedThere are really three major factors that are currently weighing on Nike stock.First, there's the concern that more tariffs will increase Nike's input costs, causing its margins to fall. That fear is overstated. China is a big part of Nike's supply chain; about 23% of the brand's shoes and 27% of its apparel comes from China. That means about one-fifth of Nike's products will have higher input costs as a result of the tariffs.But the tariffs will only raise its input costs by 10%-20%. Nike's brand equity is strong enough to pass most of the higher costs onto consumers without materially weighing on the demand. for its products Thus, Nike's margins will take a small hit from tariffs, but the hit won't be big enough to justify weakness of Nike stock over the long-term.Secondly, there are concerns that tariffs will hamper the Chinese consumer economy, weighing on Nike's growth rates in the country. But tariffs have been around for about 19 months. All Nike's China business has done during that stretch is continue to fire on all cylinders. Plus, signs are emerging that China's economy is actually starting to turn a corner and re-accelerate. Thus, going forward, Nike's China business should be just fine.Third, some are worried that a global recession is just around the corner, and that Nike's numbers will get hit hard if a recession does materialize. But a recession is not going materialize.We are one U.S.-China trade deal and a few interest-rate cuts away from the global economy going back to firing on all cylinders. Both of those things seem likely to happen sometime soon, as President Trump doesn't want the trade war to interfere with his re-election bid. Meanwhile, the Fed doesn't want the yield curve to be inverted (and/or be the cause of the next recession).So all the negative catalysts surrounding Nike don't justify the weakness of Nike stock. The Positive Factors Are UnderappreciatedThere are really three positive factors that investors are failing to appreciate adequately First, the athletic-apparel market globally remains red-hot, driven by non-cyclical consumption trends such as consumers' increased desire to be fit, healthy, and active. Those trends look poised to remain strong for the foreseeable future, providing a strong, positive catalyst for Nike stock.Second, Nike's dominance of the red-hot athletic apparel market is increasing. For awhile, NKE was losing market share to trendier players like Adidas (OTCMKTS:ADDYY). Nike has since fought back with its Consumer Direct Offense initiative, which included streamlining investments and focusing on direct-to-consumer sales. As part of the initiative, NKE also accelerated its product innovation efforts and its time to market. As a result of these efforts, NKE has been rapidly regaining market share in recent quarters.Third, given that Nike is re-extending its dominance of the red-hot athletic apparel market, Nike's revenue and profit should grow at healthy rates for the foreseeable future.Its earnings per share was about $2.50 last year. Analysts, on average, expect its EPS to rise 16% this year to $2.90, 17% in 2021 to $3.40, and 15% in 2022 to $3.95. That seems doable to me. Based on Nike's average forward price-earnings multiple of 25 and the average 2022 EPS estimate, its 2021 price target is nearly $100.Thus, fundamentals show that Nike stock can rise meaningfully over the long-term, making it a solid buy amid its recent weakness.As of this writing, Luke Lango was long NKE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 10% in the Past Week * 15 Retail Survivors to Buy for the Long Run * 7 Stocks That Wall Street Thinks Could Rise 50% Or More The post Nike Stock Looks Compelling Amid Its Recent Weakness appeared first on InvestorPlace.
Fans of Greek mythology know Nike as the goddess of victory, and winning usually describes both Nike (NYSE:NKE) stock and the company itself. Recently, though, the U.S.-China trade war has hurt Nike stock. However, strong product development and marketing have delivered decades of gains with few interruptions.Source: Shutterstock Those who buy NKE stock should win in the long-term no matter when they buy. Still, profiting in the short term requires a sense of timing. Investors should always weigh headwinds against the company's products and marketing before pulling the trigger. Outside Forces Will Hurt NKE Stock, but It Should Bounce BackWithout question, the U.S.-China trade war has impacted Nike stock in recent trading sessions. Though NKE has still risen for 2019, it has fallen by almost 10% from the 52-week high set in mid-July. It is hardly immune to bearish pressures. Its last one occurred in 2016.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, the yield curve inverted earlier this month. In past economic cycles, this has signaled a looming recession. While economic expansions do not have to end in theory, the average expansionary period since 1945 has run for less than five years. Considering that the current economic cycle began more than ten years ago, a recession remains a looming risk factor. * 7 "Boring" Stocks With Exciting Prospects Still, NKE stock has long served investors well. Falling to a low of $9.56 per share in 2009, it has now risen by more than nine-fold. Moreover, it has long maintained a healthy price-earnings (PE) ratio. The average PE over the last five years has come in at 34.74. Even during the financial crisis, this metric consistently stayed above 20. With a current PE of about 33, it trades close to normal levels amid a trade war.For now, the forward PE ratio stands at about 24.2. Analysts also forecast earnings increases of 16.5% in this year of 2020 and 16.9% next year. This factors in the effects of the trade war. Earnings estimates for the year stand at $2.90 per share. This estimate was $3.02 per share 60 days ago, but I see profits holding up well despite more challenging conditions.Marketing also remains on point. As William White points out, Nike has introduced the Nike Adventure Club. For a subscription fee, this will allow parents to get their kids' new shoes between four and 12 times per year. This provides a huge benefit to parents with fast-growing children who seem to always need new shoes. Nike Well-Positioned to Weather Political StormsNike should also continue to mitigate the politics of its business. As Dana Blankenhorn argues, Nike does not depend as heavily on China as some might think. To make this point, he cites the Nike Manufacturing Map, which shows activity in 41 countries. It also points to increased activity in places such as Vietnam, Cambodia, and Indonesia.About 18% of Nike's manufacturing now occurs in China. Hence, Nike looks better-positioned than peers such as adidas (OTCMKTS:ADDYY) and V.F. Corporation (NASDAQ:VFC) when it comes to its involvement in the People's Republic.Nike stock has also defied predictions about the Colin Kaepernick ad. These ads infuriated millions of Americans. Still, contrary to the belief of some, both revenues and the share price have risen despite this anger.Nike bases itself in Beaverton, Oregon. However, this North America base only accounts for about 42.7% of Nike sales. From that standpoint, it makes sense that Nike stock could absorb the fallout from such a controversy. Should I Buy Nike Stock?Nike stock remains a long-term winner. However, the company faces considerable headwinds at this time. Nike continues to stay well-positioned to minimize the effects of the trade war. Still, I would not expect total immunity for NKE stock. Moreover, if predictions of a recession prove true, NKE could struggle for some time to come.Still, investors need to take any negativity about Nike stock with a grain of salt. NKE stock is in no way a sell. Even if the worst fears about trade wars or recessions come true, I would not expect NKE to become cheap. Investors should view the prospect of a current PE ratio below 20 as highly improbable. If the current valuation falls below 25, investors should buy.Investors will probably profit in the long run regardless of when they buy Nike stock. Although nobody should expect to buy NKE on the cheap, they might do better than the current 33-times earnings.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy on the Dip * 7 Marijuana Stocks With Critical Levels to Watch * 7 Internet of Things Stocks to Buy Now The post Nike Stock Is a Long-Term Buy That Calls for Short-Term Patience appeared first on InvestorPlace.
For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies...
(Bloomberg) -- To satisfy regulators, YouTube officials are finalizing plans to end “targeted” advertisements on videos kids are likely to watch, according to three people familiar with the discussion. The move could immediately dent ad sales for the video giant -- though not nearly as much as other proposals on the table.The Federal Trade Commission is looking into whether YouTube breached the Children’s Online Privacy Act (COPPA). The agency reached a settlement with YouTube, but has not released the terms. It is not clear if YouTube’s changes to ad targeting are a result of the settlement. The plans could still change, said the people, who asked not to be identified citing an open investigation.A spokeswoman for YouTube declined to comment. A spokeswoman for the FTC declined to comment. The agency is expected to levy a multimillion-dollar fine.Since targeted, or “behavioral” ads, rely on collecting information about the viewer, COPPA effectively bars companies from serving them to children under 13 without parental permission. These commercial messages that rely on mountains of digital data, such as web-browsing cookies, are integral to the business of Alphabet Inc.’s Google, YouTube’s owner.YouTube has long maintained that its primary site is not for children. (The company says kids should use YouTube Kids app, which does not use targeted ads.) But nursery rhymes and cartoon videos on the main site have billions of views. The platform’s many issues with children’s content-- horrific imagery, problems that led to disabling comments-- have troubled its video creators, worried parents and empowered rivals.Getting rid of targeted ads on children’s content could hit Google’s bottom line -- but this solution would be far less expensive than other potential remedies that aim to placate regulators.In April 2018, a slew of consumer groups complained to the FTC that YouTube regularly collected information about minors to use in targeted advertising. Once the FTC picked up the case, these groups suggested that the agency force YouTube to move all kids’ videos to its designated app for children, YouTube Kids. Joseph Simons, the FTC chairman, has floated another idea. He asked the complainants in a July 1 call whether they would be content with YouTube disabling ads on these videos, Bloomberg News reported earlier.YouTube’s new proposal is even less drastic.Right now, YouTube sells two different types of video ads, broadly speaking. One simply pairs the context of a video with a commercial message. So, a YouTube clip about basketball might have an ad from Adidas. The other type uses an array of digital signals. With these ads, marketers can reach viewers in a demographic group, such as homeowners or new parents, based on Google’s vast data troves -- websites people visit, searches they make and so on.YouTube doesn’t disclose ad sales or prices, but most digital ads are more lucrative when paired with targeting data. Other tech giants, such as Apple Inc., have tried to cull back data-collecting tools in services that kids use.Loup Ventures, a research firm, estimates YouTube’s revenue from children’s media between $500 million and $750 million a year. Paring back targeted ads would dent that revenue, although Google has the ability to make its contextual ads more compelling to mitigate the damage, said Doug Clinton, a Loup Ventures analyst. He pegged the potential impact of YouTube curbing targeted ads at 10% of its overall intake from kids’ videos-- so about $50 million. “That would be the worse case, in my mind,” he said.It’s not clear how YouTube would deliver this targeting ban with the thousands of video channels with whom it splits ad sales. It’s also unclear how YouTube would define which videos are “directed at children” and which aren’t.One certainty: This proposal is unlikely to please complainants. In a July letter to the FTC, the groups argued that bans on YouTube ad targeting would be difficult to enforce. Removing the feature from select kids’ videos doesn’t guarantee that YouTube stops tracking web habits if children watch other clips, said Josh Golin from Campaign for Commercial-Free Childhood, a complainant. “Is Google still going to be collecting all the data and creating marketing profiles?” he said. “That wouldn’t be satisfactory either.”Jeff Chester, executive director of Center for Digital Democracy, another complainant, said that if the FTC settlement only forced YouTube to curb targeting, his group would likely challenge the decision.(Updates with other companies in 10th paragraph.)\--With assistance from Ben Brody and Lucas Shaw.To contact the reporter on this story: Mark Bergen in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Emily Biuso, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Athletic apparel giant Nike (NYSE:NKE) was having a great 2019 until recently. Back in mid-July, NKE stock was up roughly 20% year-to-date, largely in-line the S&P 500's 20% YTD gain. Unfortunately, escalating trade war tensions in August put a damper on Nike's good year. NKE stock has since dropped 10%. The S&P 500 is down just 3% over the same time frame.Source: TY Lim / Shutterstock.com Year to date, the S&P 500 is now up 16%, while Nike stock is up just 10%.In other words, thanks to U.S. President Donald Trump upping the trade war ante in early August with the threat of new tariffs on Chinese imports, Nike stock has gone from having a good year, to having a sub-par year.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Undervalued Stocks With Breakout Potential This recent weakness in NKE stock is overstated. It won't last, and it will be replaced by a strong end-of-year rally for three big reasons.First, the fundamentals supporting Nike remain exceptionally favorable, and pave a path for NKE stock to hit $100 over the next twelve months. Second, the optics surrounding Nike and the trade war are set to materially improve into the end of 2019. Third, the technicals imply that NKE stock is on the verge of a generational buying opportunity.As such, I'm bullish on NKE stock on this recent dip. This is a winning stock trading at an attractive discount, with huge catalysts on the horizon and a chart that says a big rebound is coming soon. Nike's Fundamentals Pave a Path Towards $100The biggest reason to buy NKE stock on this recent dip is because the fundamentals remain very strong, and pave a path for huge upside in NKE stock over the next twelve months.Nike is firing on all cylinders right now, which hasn't always been the case. Back in 2015, German athletic apparel maker Adidas (OTCMKTS:ADDYY) paired up with celebrity musician Kanye West to capitalize on the athleisure trend by blending culture with sports (the partnership actually started in 2012, but 2015 was when Adidas launched the first Kanye shoe). It was a genius move. From mid-2015 to mid-2018, Adidas rattled off a streak of twelve consecutive quarters of double-digit, constant currency revenue growth.This brilliant Adidas move had a negative impact on Nike. From 2015 to 2018, Nike's constant currency revenue growth rate slowed from 14% to 4%. But, recognizing that they were losing share to Adidas, Nike launched Consumer Direct Offense in 2017, which focused on streamlining investment dollars into trend-setting metro areas, doubling down on direct sales, and accelerating the innovation pipeline.Nike has since done all three of those things. And it has worked. Adidas' constant currency growth rate has decelerated to 4% in 2019. Nike's accelerated to 11%.In other words, Nike is back. Usually, these fashion trends last several years. Fiscal 2019 was really the first year of this Nike-first trend. Thus, it increasingly appears that Nike is in the first few innings of a new above-trend growth ramp.The athletic apparel market projects to grow at a 5%-7% rate into 2025/26. Nike should grow above that rate -- probably around 7%-8%. Gross margins should trend higher due to strong consumer demand. Opex rates should fall gradually with revenue scale.That paves a viable runway towards $6.75 in EPS by fiscal 2026. Based on historically average 25-times forward multiple, that equates to a 2025 price target of nearly $170. Discounted back by 10% per year, that implies a fiscal 2020 price target of roughly $105. Trade War Optics Will Materially Improve NKE StockThe second big reason to buy the dip in NKE stock is because trade war optics -- which have killed the stock in August -- will meaningfully improve into the end of the year.My theory here is pretty simple. President Trump is all about winning the 2020 election. He knows that his odds of winning that election are highest if the U.S. economy is firing on all cylinders ahead of the election, especially since he has tied his presidency's success to stock market highs and big GDP numbers. How does Trump get that "firing on all cylinders" economy ahead of the election? He needs low rates to juice the economy.That's why he has been so adamant about the Fed cutting rates. But, in late July, the Fed disappointed by cutting rates only 25 basis points and not sounding very dovish with respect to future rate cuts. The Fed did say, though, that the U.S.-China trade war is essentially the biggest risk to the U.S. economy. Who is behind that trade war? Trump. So, in theory, all Trump has to do to get the Fed to cut rates is temporarily accelerate the trade war.He did just that -- the very day after the Fed only cut rates by 25 basis points. That's not a coincidence. Trump doesn't want these tariffs to actually materialize and meaningfully damage the U.S. economy ahead of the 2020 election. He just wants the threat of them to create enough economic cross-currents to get the Fed to cut rates, at which point he will pull the tariff threats and reduce trade tensions.The result? An economy firing on all cylinders heading into the 2020 election, supported by reduced trade tensions and juiced by low rates.Given this framework, I think it is very likely that over the next few months, trade war optics improve dramatically. As they do, stocks that are at the epicenter of the trade war, like Nike stock, will bounce back in a big way. Technicals Imply We Are on the Cusp of a Generational Buying OpportunityThe third big reason to buy the dip in NKE stock is that the technicals imply that we are on the cusp of a generational buying opportunity in Nike stock. Click to EnlargeConsider the chart. Over the past decade, NKE stock has been on a solid uptrend with a very strong multi-year support line that has held three times before. After each successful "test-and-hold" of this multi-year support line, NKE stock proceeded to rally in a big way over the subsequent several years.NKE stock is on the verge of testing this support line again. If it does, history says that a successful test of the support line will precede a big multi-year rally in the stock. Bottom Line on NKE StockNike stock has been hit hard by the trade war over the past month. This recent weakness is creating a compelling buying opportunity into a high-quality stock supported by favorable fundamentals, optics, and technicals. As such, buying the trade war dip in NKE stock this month seems like the right move.As of this writing, Luke Lango was long NKE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Big Reasons to Buy the Dip in Nike Stock appeared first on InvestorPlace.
When it comes to Under Armour (NYSE:UAA) stock, I've loved to play the contrarian for some time. And being contrarian on UAA stock has been immensely profitable over the past year.Back in November 2018, UAA stock was flying high at $24 after the athletic apparel brand reported third- quarter numbers which easily beat average expectations. I warned that the pop was unsustainable and that the bearish thesis actually looked pretty good. By December 2018, after Under Armour had a bad Investor Day and amid a broader market selloff, UAA stock had dropped to below $17.I recommended that investors buy the dip of UAA stock. Within a month, Under Armour stock had rebounded by more than 20%, at which point I advised investors to sell Under Armour stock. UAA stock continued to rally well after that, all the way to $28, and I kept insisting that the rally was unsustainable.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn late July, Under Armour reported underwhelming numbers. Ever since, UAA stock has fallen off a cliff. Today, the stock trades hands at $18, roughly where it was in late 2018. * 10 Cheap Dividend Stocks to Load Up On Now it's time to buy the dip of Under Armour stock again. Here's why. Under Armour Stock Is Too CheapThere are three main reasons why it's time to buy the dip of UAA stock again. The first reason is that the stock is now way too cheap.My core thesis on Under Armour is pretty simple.: UAA is the wrong company in the right space. Under Armour is the wrong company because it hasn't innovated or adapted to trends . Namely, the athletic apparel market has pivoted from performance apparel to lifestyle clothes.Under Armour hasn't made that pivot, and as a result, it continues to launch products that - while good - aren't as relevant as the new lifestyle products from Nike (NYSE:NKE), Lululemon (NASDAQ:LULU), and Adidas (OTCMKTS:ADDYY). That's why Under Armour has continued to grow at a much slower pace than those peers (in Q2, for example, UAA's constant currency revenue growth was just 3%).Nonetheless, the athletic apparel space is the right space to be in now. Consumers increasingly want to live active and healthy lifestyles and look like they do so. This is creating a rising tide that's lifting all boats in the athletic apparel space, even the ugliest boats like Under Armour. That's why Under Armour's revenue has continued to grow, despite the company's lack of product innovation.This dynamic will persist. Going forward, Under Armour's top line looks poised to rise about 5% annually , with healthy margin drivers through continued gross margin expansion and positive operating leverage. I've said time and time again that UAA's earnings per share should reach $1,50 by fiscal 2025. Based on Nike's average forward price- earnings multiple of 25, UAA stock should reach $37.50 in 2024. Discounted back by 10% per year, that equates to a 2019 price target for UAA stock of about $23.Thus, in late July, UAA stock was way overvalued. Now it's way undervalued. The Optics Will ImproveThe second reason to buy the dip of Under Armour stock is that it will look more attractive over the next few months.A big driver behind the recent selloff of Under Armour stock is President Donald Trump's threat to impose tariffs on more Chinese imports. Ostensibly, that's a bad thing for all athletic-apparel companies, since a bunch of athletic-apparel products are made in China. As a result, investors have indiscriminately sold athletic-apparel stocks over the past two weeks.But Under Armour's China exposure isn't huge (only 10% of its products are made in China ). Further, a big chunk of these tariffs have already been delayed , yet another sign that Trump doesn't actually want the trade war to escalate that much and is just doing some chest-puffing with the tariffs he's already announced.All these trade-war fears will likely cool over the next several months as they have always done after trade-war flare-ups under Trump. This cooling will provide a lift for UAA stock. The Stock Is OversoldThe third reason to buy the dip of Under Armour stock is that the stock is technically way oversold, and is due for a bounce-back.The Relative Strength Index of UAA stock has dropped to 20, well into oversold territory. The last time the RSI of UAA stock was this low was back in late 2018. Under Armour stock proceeded to bottom in late 2018 and rally by more than 20% over the next month.A similar dynamic could play out this time around. Consequently, the technicals are saying that UAA stock is near a bottom and on the verge of a nice bounce-back rally. The Bottom Line on UAA StockUnder Armour is the wrong company in the right space., so Under Armour stock will not be a long term winner. Instead, it's a "buy the dip, fade the rally" stock. Right now, UAA stock is in the middle of its biggest selloff in recent memory, meaning that it's time to start thinking about buying the shares on weakness.As of this writing, Luke Lango was long UAA, NKE, and LULU. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Why It's Time to Buy the Dip of Under Armour Stock appeared first on InvestorPlace.
Adidas is taking issue with J. Crew’s recently filed trademark on a 5-stripe design that Adidas said too closely resembles its easily identifiable 3-stripe design. Yahoo Finance’s Dan Roberts, Julia La Roche and Kristin Myers sit down and discuss with Associate Professor at the University of New Hampshire School of Law, Alexandra Roberts.