by winston » Sun Jun 12, 2016 9:03 pm
not vested
Overbought Consumer Staples to Dump Now: Nike Inc (NKE)
Nike Inc (NKE) is a great example of a company that is simply priced too high.
I was raised in a house where Keds and PF Flyers — selection determined solely by which one was cheapest at the time — were the shoe of the day, so I can say that I have never been able to justify the price of premium tennis shoes and have therefore never owned a pair of Nikes.
I do confess that a chunk of my first paycheck went towards a pair of Converse Chuck Taylor All Stars, but this was decades before Nike bought the company.
My youngest is a Dr. Who fan, so we have spent some money on several hues of Chucks this year, but I still wear cheaper off brands. I am, however, the outlier, and Nike still sells well.
The problem is that you are paying a very high price for the stock right now. The share traded with an Enterprise Value/EBITDA ratio of 17.8 and a price-to-book multiple of 7.3. The stock has a trailing price-to-earnings ratio of 25 and fetches 22 times next years estimated profits.
It is a fine company, but the price is simply too high for intelligent investing right now.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"