3 Reasons to Buy Nike Today

Historically, tumultuous times offer some of the best opportunities to invest in killer stocks, and the market's recent mess surely qualifies. And though shoemaker Nike (NYSE: NKE  ) has already recovered from the recession, many investors expect even better times ahead.

In our Motley Fool CAPS community, 93% of the 1,705 investors rating the company are bullish, so there's no shortage of reasons why Nike will thrive, three of which I've highlighted below.

But here at The Motley Fool, we're all for looking at both the good and the bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below, or rate Nike yourself in CAPS.

1. What recession?
Shares of Nike recently hit all-time highs following solid quarterly earnings that showed little to be unhappy about in both domestic and emerging markets. Retailers like Dick's Sporting Goods (NYSE: DKS  ) have seen a pickup in demand lately, and analysts say that Nike has taken market share from competitors like Under Armour (NYSE: UA  ) and adidas. The company has benefited from improving trends across the board, and with strong orders for future delivery, many investors expect the good times to continue.            

2. Brand power
While some retail and apparel brands like Crocs (Nasdaq: CROX  ) have been in and out of favor, Nike has methodically fostered its image over the years and developed a killer brand that is well-known around the world, similar to Coca-Cola (NYSE: KO  ) or Wal-Mart (NYSE: WMT  ) . Its endorsements from some of the top athletes in major sports, like basketball's LeBron James and golf's Tiger Woods, should keep the brand strong, and many investors see this as a key quality to have in a long-term holding.    

3. Showing the money
Nike's strong balance sheet has helped it weather the downturn and remain focused on growth. The company has pulled in positive free cash flow in recent years, and with minimal debt on the books compared with about $4 billion in cash, many CAPS members think Nike can still thrive.

To see details of what CAPS members are saying now about Nike, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 57 points on average, take a free 30-day trial.

Fool contributor Dave Mock has more than three reasons why he doesn't dream of playing golf like Tiger Woods anymore. He owns shares of Coca-Cola, which is an Income Investor selection. Coca-Cola and Wal-Mart Stores are Inside Value recommendations. Under Armour is both a Rule Breakers and a Motley Fool Hidden Gems recommendation. The Fool owns shares of Under Armour. The Fool's disclosure policy just does it.


Read/Post Comments (3) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 05, 2010, at 4:38 PM, madmilker wrote:

    one reason not to...

    they ain't made in America.

  • Report this Comment On April 06, 2010, at 8:56 PM, rookie2009 wrote:

    Although I understand the allure of Nike, I wore their wrestling shoes in the early 70s, here's my problem. My son in law works in customer service at a huge athletic shoe distribution center, and claims the amount of complaints on Nike products is way off the charts. I hear the counter arguments about their name recognition,etc.. But I just can"t get behind a company that can't glue their soles on their shoes any better.

  • Report this Comment On January 31, 2012, at 9:32 AM, poop9998 wrote:

    They probably have more complaints because they have more buyers. >:)

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