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"NKE" - Market Should Think, Not Play

|Includes: ADDYY, Nike Inc. (NKE), UAA

"NKE" - pay no attention to the talking heads who trade tactically. Think strategically, Nike should be a 'Bull' on foreign markets and online distribution. The Nike company itself is performing well, embarking on a creative path and managing expectations. But, the company is no longer viewed as a growth opportunity by investors. Not only did it stagnate when 'bulls' should have pushing online sales and overseas performance, but it also floundered at earning which outperformed. EPS beat estimates in a period of global uncertainty and revenue was within a fraction of certainty (derived). This was buy/sell side nonsense.

Nike's yearly growth targets and KPI's are incredible, considering the company is more global than any clothing retailer. Experimental, perhaps, but that kind of Risk should drive investors and volatility in trading. The Nike beta needs to be reassessed or the company needs to raise dividends.

The problem is perceptual. Younger traders view the company as stalwart not innovative, simply due to brand awareness and ease of purchase. The much maligned Under Armour "UA" and Adidas "OTCQX:ADDYY" (ADY.DE) competition is advantageous for Nike as 'athleisure' hits epic proportions - with Nike only really confronted in any segment, realistically, by Adidas (who has always been there). Moreover, Nike owns Converse/Hurley, equals Adidas (?), when push comes to shove; they could easily become identical.

So, Adidas is a concern in certain segments, but that should bring growth. The US markets and traders need to ignore the band-wagon Under Armour (which is debt miss away from trouble - buy it if you like it), accept the global marketplace, and quit treating Nike like a macro market leader. Nike is a derived demand product, reliant on global transportation; and a segment leader, so, risk equals growth equals volatility.

The author was 'short' on Nike, due to market activity.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.