In the past week, the investor class seems to have turned sharply negative towards Nike stock. I suppose that this sentiment shift is inevitable whenever the question “What have you done for me lately?” can yield a disappointing answer. In the past year, the stock has fallen 26% from $68 to $50. It has provoked an article from Richard Suttmeier to declare “Nike reports earnings as the worst dow performer of 2016. Shares of Nike have been kicked into bear market territory.” And another writer at Seeking Alpha declared: “Nike: Just short it.”
Rather than fixate on price, I recommend that investors actually look at what the business itself is doing. In the case of Nike, it is doing what it nearly always does. And that is, deliver double-digit annual per share earnings growth to shareholders. It made $1.85 per share in profits last year. It … Read the rest of this article!