|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||113.05 - 114.93|
|52 Week Range||101.48 - 133.01|
|Beta (3Y Monthly)||0.92|
|PE Ratio (TTM)||25.72|
|Forward Dividend & Yield||1.55 (1.39%)|
|1y Target Est||130.83|
Adidas is pulling a set of all-white Black History Month sneakers after an online backlash. It’s also out with a new set of Game of Thrones sneakers. Yahoo Finance’s Alexis Christoforous and Reggie Wade break down the news.
CNBC's Sara Eisen meets with Adidas CEO Kasper Rorsted in Davos to discuss what the state of the global economy means for the sporting goods store.
On this episode of the Full-Court Finance podcast, Associate Stock Strategist Ben Rains breaks down Under Armour's (UAA) Q4 and fiscal 2018 financial results and then dives into what's next for the athletic apparel firm as its North American struggles continue.
The German sportswear brand finished its fiscal year with strong brand momentum after surpassing the 2 billion-euro sales mark for the first time, but the company issued a conservative EBIT outlook heading into 2019. “Puma is experiencing robust geographic strength in both Asia Pacific and the Americas, two markets slated for outsize growth,” the analyst said.
Shares of Under Armour (UAA) surged nearly 7% Tuesday after the company surpassed fourth-quarter earnings and revenue estimates. Now let's break down the sportswear company's Q4 results and see what might be next for Under Armour stock.
"The biggest thing is the amount of mid-market shoes that are on the list. A perennial top seller, Nike’s mid-market favorite also topped the list in 2017. “It was by a far substantial margin, considering the price point, the number of pairs that were sold were staggering vs. (Air Max) 270 or (Jordan) Concord 11,” Powell said.
Under Armour (UAA) shares popped through late-afternoon trading Friday, just a few days before the sportswear firm reports its fourth-quarter financial results. This means it's time to see what to expect from Under Armour before the opening bell Tuesday.
With fashion trends changing faster than ever, aided by social media’s influence on viral fashion, Cowen analyst John Kernan said he views improved speed in the form of design time and supply chain as a catalyst to lead to less working capital risk, higher merchandise margins and higher valuations. “We’re working with Foot Locker to create incredible product for consumers and deliver it faster than ever before,” said Zion Armstrong, president of adidas North America.
The expansion of Adidas AG (ADR) (OTC: ADDYY)'s Yeezy brands supply has led to a significant sales increase, up 500 percent in the fourth quarter according to recent NPD Group data. In its initial releases, Adidas’ Yeezy line was available in extremely limited quantities which in turn drove hype and a healthy resale market. Now that the company is making the shoes far more available for everyone, it's finally meeting demand but killing the resale market, an important component that drove excitement around the shoes.
A Disneyland for sneaker lovers, Flight Club New York boasts over 4,000 kinds of sneakers — including rare and second-hand kicks.
In the athletic apparel world, it has been tale of two cities for Nike (NYSE:NKE) and Under Armour (NYSE:UAA) over the past two years. During that stretch, Nike's operating profits have risen 3%, revenues have risen 12%, and Nike stock has risen 50%. Meanwhile, Under Armour's operating profits have dropped 70%, revenues have risen just 5%, and Under Armour stock has fallen 30%. This tale of two cities will persist over the next several years. Click to Enlarge Source: Shutterstock Multiple data-points indicate that it will continue to be the best of times for Nike stock and the worst of times for Under Armour stock. Most recently, Nike won a 10-year MLB uniform partnership that Under Armour supposedly won back in 2016, but then had to back out of because of financial troubles in 2017-18. Now, Nike's swoosh will be front and center on all MLB jerseys, much like it is front and center on all NBA and NFL jerseys, and on plenty of top European soccer jerseys, too. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 High-Dividend Stocks Yielding More Than 5% (Plus a Bonus) This development is just a microcosm of what is happening across the entire athletic apparel industry. For a few years in the mid-2010's, Nike got complacent. Competitors like Under Armour and Adidas (OTCMKTS:ADDYY) took advantage of Nike's complacency. They rapidly gained market share. Then, the sleeping giant woke up, and Nike has been on an aggressive tear ever since. Net result? Nike is back to growing again in every geography, and is taking back market share at a rapid rate. Renewed Nike dominance is here to stay for the foreseeable future. As such, at this point in time, the best thing to do in the athletic retail space is buy Nike stock and sell Under Armour stock. ### MLB Partnership and NKE Stock Back in 2016, when Under Armour was a hyper-growth company growing rapidly in every geography and across every product category, the company made headlines when it a signed a deal to replace Nike and Majestic as the on-field uniform supplier for the MLB. That deal never came to fruition. Instead, Under Armour's growth narrative came off the rails. As it did, the cost of the 2016 MLB deal became unfeasible. Under Armour had to back out. Nike stepped in. Now, Nike will be the exclusive on-field uniform supplier for the MLB starting in 2020, and will hold that title until at least 2030. That means that, by 2020, the Nike swoosh will be front and center on all MLB uniforms, and will remain there until 2030. It's already front and center on all NBA jerseys, and all NFL jerseys, too. Those deals are in place until 2026 and 2028, respectively. Thus, for the next roughly ten years, the Nike swoosh will be everywhere that consumers are watching professional sports globally. If there is anything that is true about sports, it is that that trends start with the pros. If LeBron's doing it or wearing it, all basketball players in the world want to do or wear it, too. All the pros will be wearing Nike gear for the next 10 years when most consumers see them on TV - jersey tops, jersey shorts, warm-ups, so and so forth. Thus, being the official on-field uniform supplier for every major professional sports league in the world over the next several years ensures increasing brand awareness and relevance for Nike. That's a favorable position for financials. Revenues and profits will rise as a consequence of this rising relevance. That will power the stock higher, too, most likely at the expense of other athletic apparel stocks like Under Armour. ### Valuation Makes Sense for Nike It's easy to look at the valuation for Nike stock (31X forward earnings), see that it's above the five year average valuation (25X forward earnings), and write off Nike stock as overvalued. But that analysis oversimplifies the current landscape for Nike. As stated before, what you have is a sleeping giant that has not only woken up, but is also more energized and aggressive than it has been in recent memory. That will inevitably lead to above-average growth rates. Over the past two years, revenues rose by 12% and operating profits rose by 3%. Over the next two years, revenues are expected to rise by over 16%, while EPS is expected to grow by more than 30%. That's a stark difference. You are talking about a company that's going from muted profit growth, to ~15% annualized profit growth. That huge pivot in growth requires an equally huge pivot in valuation. Over the past two years, Nike stock has traded around 25 forward earnings. Thus, today's 30 forward multiple seems more than reasonable. After all, if you throw an average 25 forward multiple on 2021 EPS estimates of $3.60, you get a 2020 price target of $90. Discounted back by 9% (taking 1% off my normal 10% discount rate to account for the 1% dividend yield), that equates to a 2019 price target of over $82. Nike stock trades under $80 today. Thus, the stock is reasonably valued against the backdrop of a strengthening growth narrative. That combination almost always leads to healthy gains. ### Bottom Line on Nike Stock Nike is back to dominating the global athletic apparel scene across every sport and every geography. This dominance will persist for the foreseeable future, likely at the expense of major competitors. As such, buying Nike stock and forgetting stocks like Under Armour is the smart move at this point in time. As of this writing, Luke Lango was long NKE. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy With High ESG Momentum * 7 Chinese Stocks to Buy Now * 5 Dow Jones Stocks Under Pressure Compare Brokers The post Here's Another Reason to Buy Nike Stock and Sell Under Armour Stock appeared first on InvestorPlace.
Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into Nike's (NKE) new deal with Major League Baseball. The episode also breaks down some news from Google's (GOOGL) YouTube TV and Hulu as the streaming TV war heats up.
A lot's been written about Nike (NYSE:NKE) here at InvestorPlace in recent days and weeks. A lot of it good. It's been some time since I've written about Nike stock and its long-time rival Adidas (OTCMKTS:ADDYY). I wonder if Nike stock is still the better buy? Let's start with what I last said about the world's largest athletic footwear and apparel company in October and go from there. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks That Could Double in 2019 ### Nike Stock and Corporate Culture I'm not going to spend a lot of time on the culture issues at Nike because they've been beaten to death by the media, myself included. However, what I had to say about Nike's future treatment of female employees last fall is worth mentioning a second time. "For Nike to really become the leader of the women's market, it's going to have to continue to show that it actually cares about women, starting with its own employees," I wrote Oct. 18. "It's not enough for Nike to fire a bunch of male executives or settle a few lawsuits. Instead, the company has to completely change how it hires and pays its employees, whether they work in stores or in the company's executive offices in Beaverton." You can talk all day about what great shoe designs it has, but if it treats a big chunk of its employees like second-class citizens, you're NOT a great business. You're a business that knows how to sell shoes. There's a significant distinction. Anyway, for years, I've been talking about Nike buying Lululemon (NASDAQ:LULU) to bring balance to its business. Now, with LULU making shoes of its own and its men's business coming on like gangbusters, there's less need for it to saddle up to a more prominent partner. At this point, Lululemon can go it alone. So, as it relates to the question of whether Nike stock is a better buy than Adidas, I think a good place to start is the women's market. There's a massive opportunity for all three companies. Who's going to capture more of it? ### Nike's Got the Upper Hand The latest figures that I have suggests that Nike's got a reasonably large lead on Adidas in the women's market. In October, I estimated Nike's annual revenue from women was 29% or around $10 billion. For Adidas, I scoured through its financials, but couldn't find anything meaningful. A Bloomberg/Quint article from March 2017 put it at 23% of revenue or $5 billion based on fiscal 2016 revenue of $22 billion. The same Bloomberg/Quint article suggested Adidas wanted to double its share of the global women's market by 2020. Adidas' goal for the women's market is part of its strategy to grow profits by 22% a year until the end of 2020, hopefully closing the gap on its bigger rival. How's it doing? In the first nine months of fiscal 2018, Adidas increased its operating profit year over year by 15.5%, a strong year by most standards, but well short of its self-imposed goal. Over at Nike, it announced its Q2 2019 results Dec. 20. Through the first six months of the year, Nike grew its operating profits by 16% on much more robust top-line revenues. So, while Nike increased sales by 10% compared to just 3.2% for Adidas, the company with three stripes rather than a swoosh, was able to grow operating profits at the same pace. In terms of margins, which are a significant part of Adidas' strategy through 2020: operating profits were 13.4% of sales, 140 basis points higher than a year earlier. Nike had an operating profit margin of 11.7% through the first six months of the year, 60 basis points higher than a year earlier. Adidas might not be meeting its goal of 22% profit growth in 2018, but it's pushing more to the bottom line despite much slower sales than its rival. If you own Adidas stock, I'd be happy with the financial performance in fiscal 2018, despite falling short of its goal. ### Nike Stock vs. Adidas Stock: The Verdict If you're a value investor, I'd go with Adidas. If you're more focused on growth, I'd go with Nike, which seems to have gotten its mojo back. As of this writing Will Ashworth did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Recession-Proof Stocks to Buy ... According to Goldman Sachs * 10 Triple-A Stocks to Buy in February * 7 Smart Money Opinions on Where Stocks Are Going Next Compare Brokers The post Nike Stock Is No Longer Head and Shoulders Above Adidas Stock appeared first on InvestorPlace.
Nike Inc (NYSE: NKE ) may finally be stealing share back from Adidas AG (ADR) (OTC: ADDYY ), according to Morgan Stanley. The Analyst Morgan Stanley analyst Lauren Cassel maintains an Overweight rating ...
Adidas CEO Kasper Rorsted told Yahoo Finance at the World Economic Forum the company is taking a different approach to technology than its rivals.
Adidas CEO Kasper Rorsted said his biggest concern is the impact of a potential Brexit. Rorsted urged that British lawmakers hold a second referendum on the matter. The CEO of Adidas ADS-DE is sounding the alarm about Brexit's impact on European consumers where the German sportswear maker does nearly a third of its business.
Back in late 2018, the long-time bearish analyst team at Wells Fargo upgraded Under Armour (NYSE:UAA, NYSE:UA) stock to "Market Perform", citing declining clearance sales, strengthening marketplace inventory, restructuring earnings-per-share benefits in 2019 and relatively low Street expectations as reasons why the worst was over for UAA stock. I immediately responded with an article saying that they were wrong, and that worst was not over for UAA stock just yet. At the time, Under Armour was a $24 stock. By Christmas Eve, UAA stock had plunged 30% to below $17. InvestorPlace - Stock Market News, Stock Advice & Trading Tips In retrospect, Wells Fargo was clearly premature in its upgrade back in early December. Now, in late January, I think we have another premature bullish upgrade from Wall Street. This time around, Goldman Sachs is upgrading UAA stock to a Buy rating, citing significant margin improvement as being the fuel for a rally toward $28. This upgrade seems like a classic case of shooting behind the duck. The reality is that the time to buy UAA stock was back in December, when the stock was hovering around the $17 range. Since then, the stock has rallied more than 20% to back above $20. Now, it's time to take profits, not buy more. Why? Because while UAA stock may see $28, it likely won't see that price tag until four or five years down the road. * The 10 Best Index Funds to Buy and Hold Today, $20 is fair value on UAA stock, meaning that the late December and early January rally is more an opportunity to take profits than anything else. ### Don't Shoot Behind the Duck One of the worst things you can do in the stock market is shoot behind the duck. That means buying a stock that has already had its day in the sun, or selling a stock whose worst is already in the rear-view mirror. Not shooting behind the duck is much easier said than done. It's tough to distinguish between buying into a stock on an uptrend that will continue on an uptrend, and buying into a stock on an uptrend that is about to reverse course. In order to distinguish the two, you have to look at the fundamentals. When you do that with UAA stock, it becomes clear that buying here is shooting behind the duck. The Under Armour brand seems to have already had its day in the sun. A few years ago, the brand was flying high on optimism regarding an operational breakout in the basketball market through the parabolic rise of NBA superstar and Under Armour athlete Stephen Curry. But, Curry has since lost popularity. So have Under Armour's other athletes like Jordan Spieth. Consequently, the whole brand rapidly lost relevance, and revenue growth and margins went in reverse. Meanwhile, competition from Adidas (OTCMKTS:ADDYY), Nike (NYSE:NKE) and Lululemon (NASDAQ:LULU) has picked up. Those brands have successfully grown mind and market share through turning into iconic lifestyle brands. Under Armour hasn't made that pivot, and as such, it is losing its mind and market share. Brand value has also been diluted by management selling more aggressively through low-price channels like Kohl's (NYSE:KSS). Overall, Under Armour's growth narrative is largely broken. To be sure, the international business has runway, North America growth is stable and margins have room to meaningfully improve over the next several years. But, that's already priced in. UAA stock trades at more than 60X forward earnings, which is about double Nike's valuation, and Nike is growing revenues at a faster rate. Thus, buying into UAA stock after a 20%-plus rally seems more like shooting behind the duck than buying into a long-term winner. ### $20 Is Fair Value for Now My five-year outlook for Under Armour stock is fairly straight forward. During that stretch, the North America business will stabilize thanks to the company's focus on the performance category and wider reach through lower price channel distribution. Meanwhile, the international business will continue to slow as other brands like Lululemon steal international share. Margins will improve from today's depressed base. But, they won't get back to peak levels because of diluted brand value, relevance and popularity. Overall, this is a stable growth company with mid-single-digit annualized revenue growth potential and healthy margin drivers over the next five years. That combination should drive EPS to $1.15 by fiscal 2023. Using a historically normal Nike-forward multiple of 25, that implies a fiscal 2022 price target of just under $29. * 7 Stupidly Cheap Stocks to Buy Now Discounted back by 10% per year, that equates to a fiscal 2018 price target of ~$20. We still aren't at the end of fiscal 2018 for Under Armour (fourth-quarter earnings are due in February). Thus, $20 feels like fair value for now. ### Bottom Line on UAA Stock Given slow growth, a big valuation and operational headwinds, this isn't the sort of stock you buy and hold forever. Instead, UAA stock should be bought on big dips and sold on big rallies. Right now, UAA stock is on the heels of a big rally. As such, this is the time to take profits. As of this writing, Luke Lango was long NKE and LULU. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 High-Growth Stocks for the Return of the Bull * The 10 Best Index Funds to Buy and Hold * 10 Lithium Stocks to Buy Despite the Market's Irrationality Compare Brokers The post It's Time to Take Profits on Under Armour Stock appeared first on InvestorPlace.
On this episode of the Full-Court Finance podcast, Associate Stock Strategist Ben Rains breaks down Nike's new Bluetooth connected, self-lacing Adapt BB shoes before he dives into how they tie into the sportswear giant's overall digital growth plans.
M&A activity in the financial markets is picking up, as record levels of corporate cash converged on a steep market sell-off in late 2018 to create a plethora of acquisition opportunities, and corporations took advantage. Thus, it's no surprise that M&A rumors have started to swirl around athletic apparel brand Skechers (NYSE:SKX). Specifically, there has been chatter that global apparel giant V.F. Corporation (NYSE:VFC) is interested in buying Skechers at $40 per share. Skechers stock trades just north of $25. Naturally, the stock bounced higher on those rumors. Wells Fargo is skeptical such an acquisition will actually happen. Their rationale -- that Skechers doesn't really fit into the VFC wheelhouse -- makes sense. VFC's biggest brands include names like Vans, Timberland and North Face. Those have some, but minimal, overlap and synergies with Skechers. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As such, a VFC acquisition of Skechers seems unlikely at this point in time. But, that doesn't mean Skechers stock won't be acquired in 2019 at a big premium. Instead, this rumor goes to show that there is high M&A interest related to Skechers, as there should be. The company and stock have "buyout target" written all over them. Thus, as M&A activity picks up in 2019, Skechers stock could very likely be acquired by a bigger retail company looking to expand into the athletic apparel space. ### VFC May Not Be the Buyer The rumor floating around is that VFC will buy Skechers at $40 per share. Skechers stock initially traded higher on the news. Then, it gave up some of those gains as investors questioned the legitimacy of the rumors. * 7 Retail Stocks to Buy for the Rise of Menswear Investors are right to express skepticism. VFC has built a portfolio of global apparel brands through acquisitions. In the 1960's, VFC acquired leading jeans brand Lee. Over the next fifty years, VFC acquired Wrangler, Bulwark, North Face, Nautica, Vans, Reef, Timberland, and many, many more. This M&A activity hasn't slowed recently. Over the past decade, VFC has made numerous brand acquisitions, both small and large. But, Skechers doesn't really fit into the VFC wheelhouse. Skechers is an athletic apparel brand which rubs elbow with Nike (NYSE:NKE), Adidas (OTCMKTS:ADDYY), and Under Armour (NYSE:UAA). There isn't much overlap between Skechers and North Face, or Skechers and Vans. Granted, VFC could be looking to make a play in an entirely untapped mainstream athletic apparel market. That would make sense. After all, the athletic apparel market is where all the growth is today. Skechers gives them a cheap entry into that big growth market. But it isn't likely, because VFC usually acquires companies within its wheelhouse. As such, VFC probably won't buy Skechers any time soon. ### But Skechers Is a Buyout Target Although VFC likely won't be the buyer, Skechers stock is a serious buyout target in 2019. The company has all the characteristics you'd want in a buyout target. Skechers has grown revenues at a consistent double-digit rate over the past five years, and has broad and global exposure to the rapidly growing athletic apparel market. Gross margins are high, and have consistently trended higher over the past five years. The brand clearly has staying power in the mid-price sneaker market, which is largely ignored by other athletic apparel companies. The domestic business is stable, while the international business is red hot. In sum, this is a growth company with staying power and high margins in a growth industry. Those are attractive features to a potential suitor. Skechers stock also has ideal characteristics for a buyout target. There's a lot of cash and short-term investments on the balance sheet (~$900 million), and hardly any debt (less than $70 million in long-term debt). Thus, the company has a net cash position of roughly $800 million, meaning the $4.2 billion market cap underlying Skechers stock translates into a $3.4 billion enterprise value. Sales over the past twelve months measure $4.5 billion, while EBITDA is around $520 million. Thus, Skechers stock is trading at roughly 0.7X EV/Sales and ~6.4X EV/EBITDA. Those are anemic multiples for a double-digit-growth company. A potential suitor could pay a huge premium for Skechers stock, and still only pay just over 1X EV/Sales. Overall, Skechers the company has buyout target written all over it. So does Skechers stock. As such, while VFC may not be the buyer, that doesn't mean the idea itself is off the table in 2019. ### Bottom Line on SKX Stock Skechers is a solid and stable growth company with a dramatically undervalued stock. That combination naturally attracts M&A interest. If Skechers stock remains this cheap for much longer, there will eventually be a takeout offer -- and likely at a huge premium. As of this writing, Luke Lango was long SKX and NKE. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Companies Apple Should Consider Buying * 7 Beaten-Up Housing Stocks Due for a Bounce Back * Take Buffett's Advice: 5 Vanguard Funds to Buy Compare Brokers The post Potential Buyout Is Another Reason to Like Skechers Stock appeared first on InvestorPlace.
The question when it comes to Nike (NYSE:NKE) is valuation. There's little argument that Nike's business is attractive, the concern is the price of NKE stock. * 12 2018 Winners That Will Be Big Ol' Losers in 2019 And price does matter here. In 2015, the earnings multiple assigned to Nike stock reached the mid-20s. NKE spent the next two years trading basically flat before rallying in 2018. At a current price of $77, investors again are paying about 25 times forward earnings. That seems too dear a price, even for this business. I made a similar argument about six months ago -- and, since then, Nike stock basically is flat. That's not a bad performance, actually -- broad markets are down over that stretch -- but it leaves NKE stock in a similar position to where it stood in July, and in late 2015. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Again, the business is attractive. But if the stock is going to rise from here, outside factors will need to cooperate as well. And, in this market, I'm not sure I expect that outside help -- or believe that NKE is the play if it comes. ### Footwear Still Drives Nike Stock When NKE neared its lows late last year, one big issue was that demand in the footwear category seemed to be slowing. In the first quarter of fiscal year 2018 (the three months ending August 31, 2017), for instance, total Nike revenue actually was flat year over year. U.S. sales declined. And that wasn't just a Nike problem. Rather, it seemed like the demand for high-end sneakers, in particular (a hot trend for years), was starting to fade. Weakness at Under Armour (NYSE:UA,UAA) and even adidas AG (OTCMKTS:ADDYY) showed that Nike wasn't alone in seeing revenue growth slow. Since then, results have improved essentially every single quarter, including a strong Q2 FY19 report. Easy comparisons have helped somewhat the last two quarters -- but Nike's execution gets some of the credit as well. That said, so does the category. Results from rivals show that footwear demand overall has rebounded. The same is true of customers. Foot Locker (NYSE:FL) has posted better numbers and so have other retailers like Shoe Carnival (NASDAQ:SCVL) and DSW (NYSE:DSW). The sneaker trend seems to be back. The question for NKE stock is what happens if and when it fades again. As we saw last year, even a market leader can't drive growth if the category on the whole slows down. And either fashion changes or a weakening economy could again lead footwear demand to slow. That almost certainly would be bad news for NKE. ### The China Story for NKE Stock Nike needs some help from the Chinese economy as well. Nike's performance in China is becoming a larger part of the story behind NKE stock. Revenue in Greater China rose 31% on a constant-currency basis in Q2, accelerating from 20% growth in Q1. The market has driven over 15% of total Nike sales in the first half -- and is responsible for over one-third of this year's total revenue growth. Does that strength hold? The rising popularity of basketball in China and the growing middle class both suggest the market could be enormous for Nike, with years of growth ahead. But there also are at least near-term concerns about the impact of the trade war and an apparently slowing Chinese economy. We've seen both Starbucks (NASDAQ:SBUX) and particularly Apple (NASDAQ:AAPL) get dinged by exposure to that market. There's a risk for Nike, too. Second-half growth, as comparisons get tougher, is going to depend at least in part on strong results from China. If the trade war has any effect, that could color even the long-term story for NKE. ### Better Options Elsewhere? None of this is to suggest that Nike stock is a short -- or even necessarily a sell. But the stock does need at least some cooperation from external factors -- at a time when investors are notably more worried about those factors. And where the case for NKE weakens is in the idea that there are better investment opportunities out there beyond paying mid-20s earnings multiples for NKE. There's no shortage of cheaper plays on China growth, both direct in-country providers and stocks like AAPL. A macro downturn would hit Nike stock hard: the stock slipped 20% just between early October and mid-December on basically no news. I'd rather take that cyclical risk with stocks that haven't yet recovered to the same extent (here, too, there are myriad options, particularly in semiconductors and housing). Has Nike peaked? Probably not. Is NKE stock going to rise longer-term? Probably; it's been a hugely impressive investment over time. But it's tough to make a compelling case for paying 25x next year's earnings for a stock that does have some external risks. * 7 Reasons Why Buffett's Bet on Apple Stock Is a Good One Investors willing to take those risks can find much cheaper options elsewhere. Even if those risks don't materialize, and NKE stock rises, it seems like other stocks could, and will, do much, much better. As of this writing, Vince Martin has no positions in any securities mentioned. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * Top 10 Global Stock Ideas for 2019 From RBC Capital * 10 A-Rated Stocks the Smart Money Is Piling Into * 5 Best Bank ETFs for This Week's Earnings Avalanche Compare Brokers The post Nike Stock Still Needs a Lot of Outside Help appeared first on InvestorPlace.
Today we'll look at adidas AG (FRA:ADS) and reflect on its potential as an investment. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us Read More...