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Nike ( Nyse : Nke )

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Nike (NYSE:NKE)

Company Description
Nike specializes in research, development, manufacturing, and distribution of various products within the apparel footwear and accessories market. Founded in 1965 and headquartered in Beaverton, Oregon, the company operates in three core segments: footwear, apparel, and other equipment. The apparel and equipment product segments offer a variety of products from shirts, pants, protective gear and many other sporting goods. Within the footwear segment, Nike has been a global leader in technology and style innovation. The company currently has over 44,000 employees and operates globally.

Investment Thesis
At this time, Nike presents an interesting investment opportunity. With the consistent longevity of dividend increases coupled with the attractive ROE ratio in comparison to competitors, Nike appears to be a great investment but that may not be the whole story. With an intrinsic value calculated from the discounted cash flow model of $87.84, Nike stock currently seems overpriced. While Nike has a strong history of consistent revenues and profits, which it is poised to continue in the future, and is a global power in its industry, Nike’s recent acquisition of Converse is driving up stock price. In the eyes of Graham this would be an unattractive investment. However, if the gap between stock price and intrinsic vale were to close, I believe this company to be a solid long-term investment in the eyes of Buffett.

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