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| Name | Nike Stock Analysis: Near 52-Week Lows, but is Nike Stock a Buy in 2024? NYSE: NKE |
| Video Uploader | Video From Investing With Andrew |
| Upload Date | This Video Uploaded At 03-05-2024 15:38:55 |
| Video Discription | Join this channel to support me and get access to perks: https://www.youtube.com/channel/UCLqygB-tDDzP8HcNDV0k7ig/join Nike’s (NYSE: NKE) stock is now close to some of the lowest prices in about 3 years, and I can see that many people have gained quite a bit of interest in them. But, there are a few issues that I want to address later in the video. Nike made $6.2 billion last year, which would put them at a ratio of around 22. It was much higher 1, 2, 3 years ago, but it doesn’t mean this is cheap now. It was very expensive in 2021 for example due to the pandemic hype but now it’s getting to a fairer value. We can see that North America represents a big chunk of the revenues, so there is potential to grow outside, especially in Europe. Now, something very attractive about Nike: the $24.75 billion in current assets is enough to cover not only the current liabilities, but the total liabilities. A bunch of them is in inventories, but even without that, they are still doing very well. The only issue I see is that you don’t have that many long-term assets, but the value of the brand itself for example is not included in something like this. So, overall, I’d say they are quite good from a financial point of view. We can see that the debt is very well spread through the future, and not even the bigger years should come with a significant repayment. The interest rate is also very very small and there is nothing to be paid this year. Unlike Starbucks - which I talked about recently - Nike has the advantage of a very strong balance sheet, meaning that when they think about growth, they don’t have to worry about the debt. And this is very important. Nike also pays a small 1.5% dividend and have a 4-year $18 bil buyback program started in 2022. I appreciate that they didn’t do it in 2021 when the stock was at its peak. So, the dividend is about $2 billion, and the buybacks would be another $4.5 to $5 billion per year, meaning a return of around 5%. However, based on the company’s cash flows, that’s not sustainable. To be honest, 1.5% is nothing - I wouldn’t even call this a dividend stock - but $2 billion for a company that’s investing like $1 billion per year can make quite a difference. Now, this is a very competitive market, with small margins, and exposed to a recession. Nike has a very powerful brand, but the average person probably wouldn’t buy too much Nike in a recession. So, in a recession - as we’ve seen before - they can crash 30-40%, so keep that in mind. And in the long-term with so many brands developing, it’s gonna be even tougher to maintain a good market position, so this is why I think a dividend and even a buyback cut and focus on investing should be optimal. Think about it: Nike talks about growth so much, but how would they achieve it? A company worth $130-40 billion investing like a few billion per year in marketing simply can’t grow too much. Another thing with potential is the focus on Direct-to-Consumer, because if they cut the middleman, they can increase the profit without having to sell more. Other videos: Lithium Stocks (Arcadium Lithium/Allkem/Livent, Albemarle, SQM, Lithium Americas/Argentina) - https://youtu.be/FQE_rjgfCuQ Verizon (VZ) Stock Analysis - https://youtu.be/_rXq1gRSURw Barrick Gold (GOLD) Stock Analysis - https://youtu.be/4CNjdtiYIKU Arcadium Lithium (ALTM) Stock Analysis - https://youtu.be/ow3NloPBF1A Medical Properties Trust (MPW) Stock Analysis - https://youtu.be/SiLVQKIm6q4 PayPal (PYPL) Stock Analysis - https://youtu.be/IrgI2-4-WN0 Stellantis (STLA) Stock Analysis - https://youtu.be/b6aAlGls9O8 Nokia (NOK) Stock Analysis - https://youtu.be/LksBa929CI4 Alibaba (BABA) Stock Analysis - https://youtu.be/XoXtXRndiTU Don't forget to like and subscribe if you appreciate what I do! On my channel, you will find a wide variety of stock analyses - from gold miners such as Barrick Gold (NYSE: GOLD) and Newmont Mining (NYSE: NEM) to tech stocks like Nokia (NYSE: NOK), Alphabet (NYSE: GOOG/GOOGL), Intel (NYSE: INTC) and even healthcare REITs like Medical Properties Trust (NYSE: MPW) and Omega Healthcare Investors (NYSE: OHI). Although I mostly focus on value investing, there will also be plenty of high-yield dividend stocks being analysed on the channel, especially if I believe that there is value in there. Song: ♪ Marshmallow (Prod. by Lukrembo) Link: https://youtu.be/y7KYdqVND4o DISCLAIMER: I am not a financial advisor and nothing on this channel should qualify as investing advice. All information is provided for your education or entertainment. It is not intended to be investment advice. This information is general in nature and has not taken into account your personal financial position or objectives. Seek a duly licensed professional for investment advice. 0:00 Nike (NYSE: NKE) Stock Review 0:13 Nike (NYSE: NKE) Stock Financial Analysis 4:34 Nike (NYSE: NKE) Valuation, Stock Price Predictions, Entry Target #stocks #investing #personalfinance #valueinvesting [GF7VhfAglFU] |
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