Nike Inc (NKE)

A company he admires, but bad news keeps coming out. They were very reliant on retail channels which no longer have the footfall they used to. They are under-indexed to online, which is where more and more demand for soft goods is going. Their quarters for many years have shown inventory issues. Feels they have also shown some erosion in price recently. He is just waiting for an appropriate entry point.

(A Past Top Pick Sep 14/16, Down 1%) He thought AMZN-Q was going to come in and that NKE-T would take better advantage of it, dealing more through AMZN-Q than they are, using them as a distributor. It is slow in coping but the stock seems to be fine. There is nothing wrong with the company. Last year was a tough year for them but he thinks it is okay and is still hanging on.

(A Top Pick Oct 27/16. Up 4%.) Sold this a while ago. Felt there was a lot more competition on the clothing side, and they were losing share there.

(A Top Pick Sept 15/16. Up 9.08%.) Sold his holdings a while ago. When they cut the border taxes, etc., this company was going to be the most affected by that. A great brand name, and will continue to do well.

Just reported and had some pretty decent numbers. He used to hold this, but sold it based on concerns over the very intensified competition happening in North America. Their growth is really dependent on keeping their market share in the footwear and apparel business. They need to rebuild their strength in the basketball area as well. He is concerned with their loss of distribution with some of the US sports stores that have closed down over the last couple of years.

This really scores well for him on value. The balance sheet is in good shape. 33% ROE. Not incredibly cheap at 22X, but a consistent steady earner. They are a leader in their space. Momentum has been the knock against them. It is still in the middle of the pack. 1.4% dividend yield.

(Market Call Minute.) He would pass on this. It is being challenged by Under Armour (UA-N) and Adidas (ADS-GR). It trades at a fairly healthy multiple.

He really likes this company. Sold his holdings when he thought they had too much inventory. The most recent concerns are that the assortment of footwear may not be the right assortment, which he imagines they will fix in time. They had too many shoes at the high end of their price range, and not enough in the mid-range. Also, there is a lot of concern about their retail channel. Still sells a fair amount through wholesalers to department stores, and department store footfall has turned negative. There is a restructuring plan in place. This still has room to fall if it goes to the bottom end of its long-term valuation range. Keeps this on his watch list.

(A Top Pick April 6/16. Down 12%.) This has a lot of competition, and it has also been a very challenging retail environment. Shares are trading at around 21X forward earnings with a 10%-12% growth rate. A bit expensive at this time. He sold his holdings last November.

The sports apparel business is saturated. These guys are having difficult times. There is over capacity and competition on pricing. It is dead money. They will fix it and it will come down.

This has been a fantastic story and has done extremely well over the years. However, you have to look forward. Today, the upstart is Under Armour (UA-N) and Adidas (ADS-XETRA) which is taking some of their business. On growth, the company is a little challenged on the Profit and Loss statement to grow earnings as fast as they have, yet the multiple of the company has maintained a fairly lofty level. There are better growth opportunities at lower prices.

It has not made a new high above the 2015 peak. There has been a lot of increased competition as well as a general market pullback. They have a very strong track record of finding their foothold. She thinks there is good upside.

They have been losing share to ADS-GR. The prospects for Nike are good. They are doing well in China. He would not count them out. Adidas has been a fantastic stock over the last couple of years.

(A Top Pick Jan 14/16. Down 2.22%.) He recently let this one go. It has been a challenging environment for these types of names. There has been intensified competition. More importantly there has been liquidation of several sporting good stores in the US, which took a lot of distribution away from this company.

For some reason, Amazon (AMZN-Q) has not been good for manufacturers like this. This has been a very well-run company. If it keeps getting cheaper, he will probably buy it again. He is still trying to figure out why manufacturers of goods are not selling stuff over the Internet.