Wednesday, December 21, 2016

Nike, Inc.: Premiums & Discounts

option strategy, put options, synthetic dividend, value investing
Nike, Inc.: Premiums and Discounts
Yesterday I took a closer look at the sports apparel giant Nike, Inc. (NYSE:NKE) through the lens of a minimum acceptable rate of return analysis. To make a long story short, Nike appears to offer investors a reasonable chance at double digit internal rates of return even if there is continued compression in the valuation that the market is willing to pay for Nike's earnings. You can read the full analysis here.
Nike is scheduled to announce 1Q FY 2017 earnings Tuesday after the close which adds a bit more excitement to the prospect of purchasing shares of Nike at the current price.
When earnings are announced, all bets are off as to how market participants will react. I've seen top and bottom line beats with raised guidance lead to declines in share prices, vise versa and everything in between. That's why investors should stick to their preferred valuation model(s).
Continue reading the article on Seeking Alpha.

option strategy, put options, synthetic dividend, value investing

1 comment:

  1. NKE is the top-ranked stock in my portfolio at the moment, and I'm picking it as the best dividend growth prospect for 2017. Thanks for your recent analysis -- I enjoyed it!

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