What Other Companies Benefit?
Shares of apparel competitor Under Armour Inc (NYSE:UA) jumped on Friday in the wake of Nike’s results, and has held itsgains in recent days. Under Armour is a fast growing, cutting-edge apparel retailer which has seen its stock price surge in recent years. The trends at Nike bode well for Under Armour and other companies engaged in the footwear and apparel market, including Finish Line Inc (NASDAQ:FINL). Under Armour is set to report its quarterly earnings results on April 18, and Finish Line will report its financial results on March 28.
These companies could report earnings ahead of Wall Street estimates, based on strengthening domestic sales trends at Nike. Whereas Under Armour has been a leading growth stock over the last five years, Finish Line has reported stagnant sales, but rising income and margins. Nevertheless, both stocks have been huge winners during this time period, with Under Armour climbing better than 170%, and Finish Line rising more than 335%.
Blue-Chip Brand, Management Team and Track Record
Investors looking for more reasons to buy NIKE, Inc. (NYSE:NKE)‘s stock should consider the company’s brand, management team, and track record. Nike is not like other companies – except for a very select few. Nike is cool, it has cache. Consumers love the brand and they are loyal to the brand.
LeBron wears Nike. Kobe wears Nike. Tiger wears Nike. Christiano Ronaldo wears Nike. The list goes on and on — and it is worth a lot of money in an industry where image is everything. This company’s brand alone is worth a fortune, and it’s going to get more and more valuable as the company continues to expand its international footprint.
This is also a company with a stable management team that has made a lot of money for investors. This company has only had three CEOs in its history, and one of them only had a tenure of two years. For the most part, NIKE, Inc. (NYSE:NKE) has been run by Phil Knight, the company’s founder, and Mark Parker, its current CEO.
Parker, who started with Nike in 1979, has been in the top job since 2006, while Knight remains the Chairman of the Board. As an investor, this kind of stability is almost always a good thing — especially when the stock continues to go up and up. Over the last 5 years, NIKE, Inc. (NYSE:NKE) has climbed 77%, and on the 10-year chart, the stock is up 347%. What is not to like?
Time to Buy?
Overall, Nike is one of the best bets in the stock market for long-term investors. Furthermore, the company’s third-quarter results might be the catalyst that triggers a powerful breakout in 2013. Given the company’s operating momentum, preeminent brand, stable and proven management team, and track record of creating value for shareholders, this is a name that investors might need to scoop up now.
The article It’s Time to Buy Nike! originally appeared on Fool.com and is written by Ryan Glosier.
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