Red Dirt RubyConf 2011

  • Keynote
    Aaron Patterson
    Open source contributions include:
    ARel, Nokogiri, and Mechanize
    Aaron Patterson - AT&T Interactive
  • Keynote
    Dr Nic Williams
    Open source contributions include:
    Hudson.rb, RoR Textmate Bundle, and ChocTop
    Dr Nic Williams - Engine Yard
  • Conference Themes
    nike slides on amazon
    ´╗┐Nike Is Growing Its Business With Impressive Numbers SummarySportswear giant Nike (NYSE: NKE) has been performing impressively over the course of the last 5 years with top lines as well as bottom lines showing impressive growth. The company reported net income of $655 million during the quarter, increasing almost 23% from net income of $534 million in the same quarter of the previous year. Nike has been implementing sustainable supply chain systems which have given them easy access to raw materials while enhancing efficiency, reducing transit time and allowing for an environmentally sustainable approach. The company also makes use of systems mapping on order to identify its points of leverage in its global supply chain. Thus overall, a defensive stock with a high PE ratio and a decent dividend yield signifies a highly worthwhile investment prospect. Sportswear giant Nike (NYSE: NKE) has been performing impressively over the course of the last 5 years with top lines as well as bottom lines showing impressive growth. Nike has capitalized on its prowess as a retailer to grow. The company's outlets are known for their efficiency and high quality of customer service. Nike is also known for its efficient high end supply chain management and thus is able to minimize unused stock on a regular basis. The company has also stepped into the market as a casual apparel retailer especially in terms of footwear. The company has capitalized on the growing popularity of sneakers especially among the youth in order to boost revenues and grow. In terms of share prices, 2014 has been an impressive year of growth. The company's share prices have grown 34% over the course of the year, considerably more than the growth in share prices of competitors Adidas (OTCQX:ADDYY) and Puma (OTCPK:PMMAF). The company's share prices reached a decade high level near the $100 mark nike womens running shoes back in November. Since then investors have been selling shares on strength. The company's shares are currently trading near the $94 mark. Statistical overview of Nike's last reported financial performance Nike last reported its financial performance back in December for the second quarter of its fiscal year 2015. It is important to note that the company begins its fiscal year in June. For the quarter, Nike reported revenues of $7.4 billion, up almost 16% from $6.4 billion in the year ago quarter. Moving down the financial tiers, the company reported operating incomes of $889 million during the quarter, up almost 21% from $735 million in the year ago quarter. The company's operating incomes grew owing to strong revenues particularly on the back of favorable market trends for sneakers. Moving further down, the nike lunarglide 6 company reported net income of $655 million during the quarter, increasing almost 23% from net income of $534 million in the same quarter of the previous year. Diluted earnings per share for the sportswear giant thus amounted to $0.74 as compared to $0.59 per share in the year ago quarter. Moreover, during the quarter, Nike continued its strong tradition of rewarding investors by paying out dividends of $0.28 per share. Nike has established its prowess in the retail sector, with store efficiency continuously being worked on. The company is known for its powerful advertisements. The company's marketing is regarded as among the best in the world and with illustrious names such as Roger Federer, Lebron James and Cristiano Ronaldo on their brand ambassador list, the company has guaranteed sales boosts owing to successful advertising and marketing campaigns. Moreover, Nike has been implementing sustainable supply chain systems which have given them easy access to raw materials while enhancing efficiency, reducing transit time and allowing for a more environmentally sustainable approach. The company also makes use of systems mapping on order to identify its points of leverage in its global supply chain. Additionally, Nike is known to have established a majority of its manufacturing facilities in South and South East Asia, the company has thus positioned itself ideally in order to take advantage of the cheaper labor in the region. The South and Southeast Asian regions also give Nike easier access to raw materials as they have major cotton producing countries. With labor costs in the region expected to go down further, there could be a potential 10% upside for operating incomes in fiscal year 2015 owing to favorable labor cost trends. Moreover, the strength of the dollar against a basket of Asian currencies indicates that the company has access to much cheaper raw materials in the region. Favorable raw material cost trends in manufacturing regions could indicate a further 5% upside for operating incomes on a currency neutral base. Nike as an investment prospect For investors, it is important to note that Nike's shares are trading at almost 28 times their earnings. The company's PE ratio is considerably higher than the industrial average of 16.5, indicating that there is a huge degree of value for investors going forward. The company has a dividend yield of almost 1%, with a consistent dividend payout tradition. Moreover, using the constant growth dividend discount model, taking into account returns to equity of 14% and the average growth in dividends for the last 4 years, which amounts to almost 13%, I calculate a $93 estimate for the company's shares, which is close to current market price. Moreover, if the current risk free rates of 0.25% are taken into account, the company's beta amounts to 0.75. Thus overall, a defensive stock with a high PE ratio and a decent dividend yield signifies a highly worthwhile investment prospect. Investors will be hedged on the downside owing to the defensive nature of the stock while a high PE ratio indicates significant growth prospects for the company. The last reported earnings performance is a fair indicator of the times to come for Nike, with top line and bottom nike outlet branson lines expected to continue to show double digit growth.