Wednesday, March 5, 2014

Recent Purchase (part 2): Nike

Nike (Ticker: NKE) is another stock that I have been watching for quite some time. As per my "watch list"; I have been observing Nike’s stock price since March 27, 2013 at which time it was trading at $58.66 per share. I watched the price consistently go up at a steady pace (with its occasional down days). However, I cant really recall any crazy fluctuations (as it was the case with DIS). Despite all that, I still remained a little hesitant with buying the stock mainly because of competition within the industry, controversies, and not having the time to do enough research.

The price passed the $60 mark and then went in to the $70s once again making me a little "upset" that I didn’t get in back in the 50s.

Well, I eventually got around to finishing my homework on NKE and on 01/14/2014 I pulled the trigger and bought myself some shares. Just as it happened with DIS, I purchased on a down day and during the weeks in which the market was quite bearish. The stock hesitated a bit post purchase going down for a bit until it began to stabilize itself once again and proceeded forward. I am up 3.10% (as I type this) since day of purchase. It is not nearly as high as DIS (just yet) but to be able to say that my investment has appreciated nearly over 3% in less than 2 months is something I am very happy about!!!

Who else would give me that rate of return?? Definitely not a savings account and much less putting my money under a mattress. This is the difference between being passive with your money (ie: stacking it all away in savings gaining 0.0001%) V. actually putting your money to work for you!

(REMEMBER: putting money away for an emergency and for your bills [including any kind of debt] should always come first. Any extra money, which you wont need any time soon, is what you should be putting to work in the stock market).

To all my investors out there just starting out—I just want to point out that everyone whom invests has their own "investing personality" meaning that they have their own strategy and their own approach towards stocks or any kind of investment instrument. Some go for the new and exciting IPOs, others love penny stocks, while others (as it is my personal case) concentrate mostly solid/established companies, preferably that pay dividends, and that still show potential for growth. I like to see that a company, regardless of how popular it may be, still works hard towards creating and maintaining sustainable competitive advantage, which I feel is the case with a company like Nike.

Here are some of the main reasons why I feel strongly about this stock:
  1. Leader in its industry- Nike is currently the largest sports/fitness apparel manufacturer in the world!
  2. Pays Dividends- Currently pays 0.96 per share (yield: 1.20%) and has been paying consistent dividends since 1984.
  3. Healthy 2013 returns (specially in Europe and China) and a positive outlook for 2014 (based on analyst reports from Credit Suisse & S&P which I examined)
  4. The company has an international presence ß gotta’ love international!
One of its most recent major competitors is UnderArmor (UA) which has become increasingly popular in fitness apparel and is working hard to establish a brand synonym with quality. That’s another great company which I am also keeping my eye on. However, at the end of the day, NKE is still king and I am proud to call myself a part owner of NIKE!

Tell me, what are you thoughts on Nike? (the company or the stock) How many Nike products do you own?