Featured Content

An Important Message from Michael Lombardi:

An Important Message from Michael Lombardi:

I've identified six time-proven indicators that now all point to a stock market crash in 2015. You can see my latest video, Six Time-Proven Indicators Now All Pointing to a 2015 Stock Market Crash, which spells out why we're headed for a crash and what you can do to protect yourself and even profit from it, when you click here now.

How Five Hundred Bucks and a Handshake Created a Colossal Stock Market Winner


Handshake Created a Colossal Stock Market WinnerOne company that always reports early is NIKE, Inc. (NYSE/NKE).

The company has doubled on the stock market since 2010, and it has more than tripled since 2006.

This kind of stock market performance really is amazing. In just three years, a $12.5-billion company has become a $25.0-billion company.

From Oregon, Bill Bowerman and Phil Night created Blue Ribbon Sports with $500.00 each and a handshake.

In January of 1964, Bowerman and Night ordered 300 pairs of Tiger brand shoes from Onitsuka Inc. of Kobe, Japan for distribution in the U.S. market. Night began selling the shoes out of his Plymouth “Reliant,” and Bowerman began tearing them apart.

Bowerman took an idea from his wife’s waffle iron and created a new running shoe.

Jeff Johnson (a friend and the company’s first employee) came up with the NIKE name in 1971. Shoes were successfully tested and Carolyn Davidson, a graphic design student at Portland State University, created the “swoosh” logo. The company’s first shoes were sold at the U.S. Track & Field Trials held in Eugene, Oregon. The rest, as they say, is history.

As a stock market investment, NIKE has mostly been excellent. The position was flat between 1997 and 2004. The company signed Eldrick “Tiger” Woods in 1996.

In its latest quarter (ended February 28), the company’s comparable sales grew nine percent to $6.2 billion, up solidly from $5.7 billion. Comparable earnings grew from $560 million to $866 million, for a gain of 55%, while earnings from continuing operations were $662 million, up 16% from $569 million.

Sales growth was strongest in North America (18%), followed by Central and Eastern Europe (16%), then Western Europe (8%). Western Europe’s growth is uncharacteristic compared to other earnings reports from many global brands.

On February 1, 2013, NIKE sold its Cole Haan brand to Apax Partners for $570 million. The deal resulted in a gain on sale of $231 million. But on November 30, 2012, NIKE sold Umbro to Iconix Brand Group for $225 million. This resulted in a loss of $107 million, net of tax.

I consider NIKE to be fully valued on the stock market currently. With a price-to-earnings ratio of approximately 25, the company’s earnings growth combined with its dividend suggests it’s a little pricey.

NIKE is a shining example of how a business can still be very successful during tough times. Arguably, the position held up extremely well on the stock market through the financial crisis and the recession.

Wall Street estimates for the company have been going up for the next quarter, all of 2013, and all of 2014.

Realistically, I wouldn’t say the stock is a buy right now, simply because the stock market is at an all-time record high. It’s very difficult to consider new positions with the stock market sitting so high.

I would say, however, that this company would be worthy of consideration for long-term investors if the stock were to experience a meaningful retrenchment.

While a track record of success certainly cannot predict the future, NIKE’s demonstrated record of innovation and wealth creation still makes it a winner.

Premium Content

Secret "New Swiss Bank Account" Safest Way to 44% Returns


It's the safest—but, until now, completely ignored—place for your money. Because these elite "bank accounts" pay guaranteed 5% cash payments per annum on top of returns on capital exceeding 44%... Learn all about them here.

About the Author, Browse Mitchell Clark's Articles

Mitchell Clark is a senior editor at Lombardi Financial, specializing in large- and micro-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, including Micro-Cap Reporter, Income for Life, Biotech Breakthrough Stock Report, and 100% Letter. Mitchell has been with Lombardi Financial for 17 years. He won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was a stockbroker for a large investment bank. In the... Read Full Bio »

Exclusive profit Confidential Presentation

Stocks that Double in Two Days No Matter What the Market Is Doing?

Stocks that Double in Two Days No Matter What the Market Is Doing?

We picked SafePay Solutions stock and it jumped 142% in two days. We then picked China 3C Group stock and it went up 103% in two days. To learn more about our stocks that double in two days, see them here now.