Analysis of Nike share price for trading

In the field of stock market investment, is the big names that attract a lot of traders because the brand that they represent is synonymous of profitability and popularity. This is particularly the case of Nike whose titles are available for trading on the stock market. Let find out together how to efficiently speculate on this asset by learning some essential information about this group, as well as a historical analysis of its price over the last ten years.  

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Our advice for trading Nike share

Tip number 1

We would principally monitor all the actions completed by Nike with the objective of gradually widening its range from a particular shoe sector, particularly in developing its range of fashion clothing and accessories.

Tip number 2

We would also monitor the group’s international expansion strategy, particularly the implantation of its brand in the emerging countries such as China or India that represent a favoured consumer target ripe for exploitation. This could include worldwide events where the brand is represented and which could provide excellent publicity for the group.

Tip number 3

The foreign exchange market is also a significant element to monitor when trading in Nike shares. In fact, given that this company manufactures in different countries and also sells in numerous countries, its margins and costs can be directly impacted by the foreign exchange rates. Advantageous or disadvantageous these Forex rates can boost the company’s profits or, on the contrary, reduce them even to the point of forcing sales at a loss.   

Tip number 4

Nike’s competitors, who have used its economic policy to produce quality products at a lower price for themselves, also present a threat that needs to be monitored due to movements in the market share of each of the major companies in this sector.

Tip number 5

Finally, the pricing policy pursued by Nike and its retailers should also be monitored due to the high volatility of the market and the instability of the consumers purchasing power.

Trade Nike shares!
75% of retail investor accounts lose money when trading CFDs with this provider.

About Nike:

Nike is an American company specialized in the design, production and the sale of sport footwear, goods and equipment. It includes brands such as Nike, Cole Haan, Bragano, Converse All Star and Hurley.

Its main activity concerns the manufacture of shoes which represents 58.3% of its turnover, then clothing with 29.2% of its turnover and sport equipment which represents 6%.

Nike has more than 858 stores around the world and mainly in the United States.

 

Nike main competitors:

Nike has been one of the world’s leading sport equipment manufacturer in the world for many years. Thanks to the diversification of its sportive goods such as shoes and clothing, it is currently one of the top three in this sector.

However, it must constantly fight to keep its shares on the market and to win new customers in the face of limited but very strong competition.

Puma is currently the leader in this sector which bounced back in 2017 after some years of decline in its results. it is immediately followed by Nike which remains in front of its most serious competitor, Adidas. The two companies created in Germany are the only ones that represent a serious challenge to Nike.

We advise you to closely monitor their results and the evolution of their positioning on the market in order to make a correct fundamental analysis of Nike’s shares.

 

Nike’s main partners:

Find out more about Nike’s main partnerships over the recent years.

  1. In 2003, Nike established a partnership with Philips electronics in order to develop audio sport products such as a portable MP3 player as well as portable cd players and wireless headphones.
  2. In 2006, Nike signed a partnership with Apple in order to create the Nike+ iPod whose production was finally be stopped quickly because of a lack of success.
  3. In 2014, Nike even joined one of its main competitors, Adidas, in order to produce shirts for the French football team, which were in shortage in the official stores. Nike therefore had to call Adidas to supply stores quickly by increasing the production of the jerseys.

 

Analysis of Nike’s share price:

Nike’s share price is currently listed on the US NYSE market in the united states and is part of the Dow Jones stock index.

The historical graphic data, shows us, an upward evolution in stages, over the last ten years, with some punctual downward retracements.

 

Important stock market data about Nike:

If you want to invest smartly on the course of Nike, you need to know how this American company ranks on the international stock market. To help you, here are some essential stock market data concerning the ranking of this title and its technical and financial specificities:

  • In 2007, Nike’s total market capitalization was 89 278.54 MUSD.
  • The number of titles issued by Nike and currently in circulation on the market is around 1.682.000.000.
  • Nike’s share price is currently listed on the NYSE main market in the United States
  • Nike is also part of the Dow jones Industrial Average stock index and it has one of the largest stock market capitalizations in the United States.
  • Nike’s shareholding currently consists of 5.30% of shares from Vanguard group, 4.28% of shares from Fidelity Management and Research Company, 3.31% of shares from the State Street Corporation, 2.40% of shares from the BlackRock Fund Advisors, 2.05% of shares from the Wellington Management Company, 1.43% of shares from Jennison Associates, 1.25% of shares from Northern Trush Investments, 1.23% of shares from Janus Capital Management LLC, 1.10% of shares from Lansdowne Partners Limited Partnership and 1.08% of shares from Lone Pine Capital.

 

Nike’s economic and financial history:

Here are some economic and financial events that have marked the history of Nike over the course of the last years and that have impacted the course of this asset.

  • In 2003, Nike bought Converse Shoes for an amount of $305 million.
  • In 2005, Bille Perez succeeded Phil Knight as the head of Nike. The latter was however replaced in 2006.
  • In 2007, Nike bought Umbro for €409 million.
  • In 2008, Nike sold Bauer for an amount of $ 200 million.
  • In 2009, Nike became the equipment supplier for the French football team with a contract of €320 million , which they recovered from its competitor Adidas. That same year, the company filed a patent for automatic lacing shoes.
  • In 2011, Greenpeace created controversy when it announced that it had found traces of hormonal disruptors in samples of the brand’s clothing. The company then committed to eliminate any toxic chemical substance from its chain before the end of 2020.
  • In 2012, Nike launched the Nike Barber Shop, a barber shop inspired on the 20s which was opened in 6 cities around the world including in Paris, Rue des Halles. These barber shops were accompanied of an advertising clip shot with football player Mario Balotelli and their objective was of course to promote the brand in an original way. Also, in 2012, Nike sold Umbro to Iconix Brand group for an amount of $ 225 million.
  • In 2013, the company also sold the brand Cole Haan to the Apax Partners Investment Fund for $ 570 million.
  • In 2016, Nike launched a new pair of tennis shoes called Air Max 98, after the release of the Lunar Flyknit Lunar, Foamposite and Air Force 1 in collaboration with Supreme.

 

The advantages and strong points of Nike shares as a stock market asset:

Like any serious investor you undoubtedly search for the elements that can assist you in identifying and implementing your long term trading strategy on the Nike share price. And of course the best way to anticipate basic trends of this asset on the stock market is to compare the strengths and weaknesses of the company to learn how it will react in the future. Here therefore to assist you is a summary of the advantages of this group and its shares on the stock market. We will of course also examine the major disadvantages and weak points of this company later in this article.

Firstly, concerning the principal advantages of the Nike Group we can of course cite the high competitive level of this company. In fact, the Nike Group pursues a very aggressive policy in this aspect and displays a real aversion towards its major competitors. This strategy that aims at directly attacking the competitive brands has already borne fruit over the last few decades and should continue to enable the group to gain new clients.

Another undeniable advantage of the Nike Group is related this time to the production chain as this company does not possess a factory. It therefore invests very little in buildings or recruitment and training of a workforce which enables it to make major savings and promotes a lighter, less complex organisation than that of other major groups in this sector. In fact Nike prefers to invest in research and development and offers innovative and evolutionary products by then producing these new items where it wishes to do so and at very low prices too. Nike therefore benefits from a great negotiating strength regarding its manufacturers and is constantly seeking ways to minimise production costs, never hesitating to regularly move the production of its items from one sub-contractor to another.

Finally, the last strong point of Nike on which we can count concerns of course the global aspect of this renowned brand that is recognised worldwide as the number one sporting brand on an international level. The brand logo has also been easily identifiable by everyone for a long time now.

 

The disadvantages and weak points of the Nike share price as a stock market asset:

After summarising the major strong points of the Nike company and therefore the probable advantages of its stock market share price it is our duty to also remind you of the disadvantages and weak points of this group so you are able to moderate your judgement before implementing your trading strategy over the medium or long term on this asset. Here therefore is a summary of this company’s weak points that could negatively impact the share price.

Firstly, if we take into account the extent of the range of products developed and sold by the Nike Group we can also note that, by looking closely at the sales distributions by sectors, that the company’s revenue remains strongly dependent on the sports shoe sector. Therefore, the slightest loss in the market share in this sector or a major change in consumer behaviour or habits can represent a major risk for the group and its profitability.

Finally, the second and last weak point of the Nike company concerns its strong dependence on its retailers. In fact, the Nike Group only has a few distribution points it owns worldwide and mainly relies on its third party resellers for product distribution. As the retail sales sector is highly sensitive to price changes the retailers therefore try to pass on lower market prices through Nike products which reduces their margins. They therefore have a way of applying pressure on the group.

Simply invest on Nike’s price of action:

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Trade Nike shares!
75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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