Nike is a strong brand showing consistent revenue growth and excellent financial health.
Nike’s revenue and earnings outlook for the next 5 years shows a continued ability to generate superior growth and dominate the industry.
An estimated intrinsic value for shares of Nike based on best- and worst-case scenarios for the company, industry, and economy.
In analyzing stock valuations, people often use the price-to-earnings ratio as a shortcut. The problem is, it is just that a shortcut. It is the stock price divided by the trailing 12 months’ earnings per share. It is a simple measurement of past performance in a complex system that cannot be reduced to one number. P/E is a screening tool at best. It does not tell us enough about the most important factors of stock ownership: future earnings and cash flows.
Nike (NKE) has a P/E ratio of around 65, so investors are currently paying 65 times the last 12 months’ earnings per share to buy the stock. If the last 12 months’ earnings per share were to continue indefinitely, it would take 65 years to make your money back. So, initially, Nike looks extremely expensive. Thankfully, the appropriate price of a stock is based on a lot more than current EPS. Let’s conduct a more detailed assessment of Nike’s current earnings and project its future earnings to get a more accurate assessment of Nike’s intrinsic value. Continue reading…
Many people I talk to want to do a better job of saving for retirement but don’t know where to begin. Maybe their employer offers a 401(k), but they don’t feel like it’s enough, or maybe they have no 401(k) at all and desperately need to get something started.
Many people also don’t have much money to get started with. They might want to start investing as little as $20 per month. The fee structures of mutual funds and the transaction fees brokers have for purchasing securities can make investing small amounts of money at a time very impractical, but that aspect of the investment industry is changing, and there are some new opportunities for small-time investing that weren’t there only a few years ago. Continue reading “How to Start a Retirement Fund with Almost No Money”→
Microsoft (MSFT) is one of the leading companies in the technology sector. The media and the President may obsess over Amazon (AMZN), investors may follow Warren Buffett into Apple (AAPL), and the average Joe may spend half his day on Google (GOOG/GOOGL), Netflix (NFLX), and Facebook (FB), but Microsoft has been quietly expanding its empire far beyond its traditional PC business. It has everything from a popular video game system to a 500 million-member social network to commercial software and cloud services. Those products are generating growth and income for the company’s shareholders. Here are three reasons they are doing this so well. Continue reading “3 Reasons Microsoft Is a Great Company”→
Facebook violated its own terms of service by not protecting customer data from developers.
This scandal will drag out through government investigations, regulatory moves, lawsuits, and the exposure of further details about Facebook’s failure to protect user data.
The outlook is not entirely negative. FB still has long-term earnings potential, and there may be opportunities to buy it cheaper.
In his questioning of Facebook (FB) CEO Mark Zuckerberg, Senator John Kennedy said that “there are some impurities in the Facebook punchbowl.” More bluntly, he continued, “your user agreement sucks.” Kennedy’s questioning deteriorated from there, as he did not get specific enough about the user agreement and showed a lack of understanding about how Facebook and its 3rd party apps work. However, he was absolutely correct in his starting point about Facebook’s user agreement. It sucks. Continue reading at Seeking Alpha…
SDEM invests in dividend-paying companies in emerging markets.
The stocks in this fund have been hit hard by political instability.
A technical pattern presents an opportunity to start a long position.
Value investing and technical trading are very different philosophies, but the two can work together sometimes. I primarily screen for value but will occasionally take advantage of technical trading strategies to time a purchase…
You may have noticed that your online broker offers a few order options when purchasing a stock or other security. I wrote in my review of the Robinhood app that many reviewers on the App Store blamed Robinhood for paying too much for a trade when the real problem was that they did not understand and properly utilize Robinhood’s limit order option.
If you simply post the default market order, your order will go through at whatever price your broker and another trader agree upon a few seconds or minutes later, which might not be the same market price you see on your screen. That could be frustrating if the price goes up in that short period of time, which is not unusual.
A limit order makes sure that your trade won’t go through any higher than a certain price. If the price of the security goes up between the click of the order button and when the trade actually happens, the broker won’t buy it for more than the customer wants to pay for it. It will wait for a cheaper trade to be available or the order to expire.
There are tons of order types being used in today’s technology-driven trading environment, most of which the average investor does not even know about. Commercial investment brokers like the popular online ones usually only offer a few order types, and it is probably for the best, as we are about to see how complicated they can be.
A novice might notice that his broker offers the option for a stop loss order and wonder what that means. He could hit the ‘help’ button or Google the term to see what it is, and at first glance it may look like an interesting idea. Let’s dig deeper into what it is and what the broader implications of it are before we use it to make a major financial decision. Continue reading “What Is a Stop Loss Order? Why Use It? And Why Not?”→