Nike Stock Is Weathering The Current Market Storm

While the market is still hovering near 52-week lows, some stocks have bounced back nicely and are climbing back to their 52-week highs. Nike (NYSE: NKE) is one of those stocks.

Nike stock was caught in last month’s sell-off and fell over $23 from the 52-week high of $117.72 on August 5. It slid to an intra-day low of $94.50 on August 24, but has since recovered most of those losses. In the past seven trading days, the stock is up more than $17 closing Friday’s trading session at $111.82, just $6 off the 52-week high.

Source: Nike stock price data by amigobulls.com

The stock’s rebound reflects the strong financials of the company.  Nike is a fund manager’s ideal stock — a steady climber.  The stock price beat the market over the last few months with less volatility (its beta is 0.72 vs. 1.0 for the market).  Nike’s revenue for the past two years has consistently increased about 10% year-over-year.

Source: Nike revenue data by amigobulls.com

The company’s profits in 2013 were about 9% higher than the previous year, while in 2014, profits increased 21.5% YoY.

On June 25, the company handily beat earnings expectations, sending the stock to all-time highs within two months.  Nike reported revenue of $7.78 billion vs. $7.69 billion expected.  It also beat wall street EPS consensus of $0.83 by  15 cents, reporting EPS of 0.98.  Gross margin also increased slightly, benefitting from higher prices.

Nike is growing by increasing sales in different segments of its market.  Last quarter, sales of women’s apparel grew faster than men’s apparel.  The company continues to expand sales to the youth athletic market.  Of course, the company has a long history in the runner’s market.  The company continues to innovate and offer a pipeline of new products in each of these categories.