Recommendation: Buy Nike (NKE)

Key Investment Points

• High-growth, significant upcoming opportunities

• Unfairly discounted valuation following company turnaround

• Spin off of ABC division will unlock value

Industry Overview

• Industry competitive dynamics

• Are products commoditized? Monopoly? ASP going down due to competition? (Impact on profit margins)

• Industry demand drivers

• What causes customers to buy this company’s product?

• Industry trends

• What kind of shifts in demand are occurring (and what impact on top, bottom line)?

• E.g. consumer preference for higher-margin green alternatives

• Growth outlook

• What are the key metrics of this industry?

Nike (NKE) Company Profile

• Business profile – How does this company generate revenue?

• International vs. domestic

• Growth/earnings outlook

• Management quality

• Length of tenure doesn’t equal experience or quality

• Is management shareholder friendly? Honest? Can they execute?

• Competitive landscape, product positioning

• Does company have a sustainable competitive advantage?

Prev Close: 61.031y Target Est:

71.40

52wk Range:

51.50 - 67.93

Avg Vol (3m):

3,820,250

Market Cap:

29.68B

P/E (ttm): 17.69EPS (ttm): 3.376Div & Yield: 0.92

(1.50%)Forward P/E:

Investment Information

3 Year Price Graph (Morningstar)

SWOT analysis, and how each point impacts company EPS/valuation multiple

SWOT Analysis

Strengths Uniqueness of Products Globalization Strive for continuous Improvement Strong Research & Development Weak Dollar

Weaknesses Dependence on Demand for Products in Sales& Marketing Foot Locker- significant Customer ( over 10%) Futures Ordering Program Transportation Costs

Opportunities Competitive Advantage in sponsoring athletes Research& Development Trademarks Cost Efficient Marketing Olympic Games in China

Threats International Operations and Trade Competition Dependence on Innovation Dependence on high quality endorsers of their products

Investment Thesis

• In one sentence, answer the question: Why should we own this stock now?

• Why overweight?

• Key value drivers

• Potential Catalysts

• Key questions

• Key risks

Sector : Consumer Discretionary Industry Group: Retailing Current Holdings: ZUMZ, VCR Target Sector Allocation: 7%, $24,772 Current Sector Allocation: 2.24% , $7,927 Remaining Allocation: 4.76%, $16,845

BUY 130 shares of NKE at Market Price (approx. $8,000, 2.26% of portfolio)

Holding Period/Exit Strategy: 2-3 years, Consider selling if stock price rises above $80 or below $40 or if fundamentals change dramatically

Portfolio Placement / Recommendation