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business newsNike Jumps to New All Time High
By
Justin Sharon
Sep 24, 2010 4:00 pm
The leading supplier of athletic shoes reaches a new record high today after reporting fiscal first quarter profit rose 9% from last year.
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Also read Nike Patents Sneakers From Back to the Future II and The Bad Boys of Business: Nike.
Nike is still seen as the big, bad wolf in Latin America’s largest nation after a strange incident at a major soccer match in 1998, which still has conspiracy theorists talking. But it’s still good to be Brazil. The land of sea, sand, and samba, home to both the 2014 World Cup and 2016 Olympics, and the world’s biggest producer of everything from orange juice to coffee, today has yet another excuse to party. Carnival has come early to Rio after state-owned Petroleo Brasileiro SA (PBR) -- plain old Petrobras to you and me -- sold some $70 billion in shares on Thursday, history’s biggest-ever equity offering. Plans entail using proceeds to develop enormous pre-salt oil and gas reserves found off the country’s southern coast in 2007. Brazil is unrecognizable from the banana republic basket case (emblematic of so many dictatorships in the area) it was during the bad old days. In 1990, inflation peaked at an astonishing annual rate of 6,821%. Today its popular President Luiz Inacio Lula da Silva hailed the stock offering a “new chapter in Brazil’s development” and the country has clearly come a long way. Oil drilling isn’t exactly politically popular post BP Plc (BP) but the world’s energy needs are only increasing and Petrobras has a global deep water market share of more than 20%. Although development of the new discoveries will be technologically difficult and extremely time consuming, vast riches await long-term holders. In the meantime, the company has certainly rescued the reputation of orange jumpsuits from Lindsay Lohan. Four ETFs to Play Brazil’s Prosperity and Brazil’s Rise to the Top provide additional insight on an emerging South American superpower.
There’s no end in sight to the misery at Finish Line Inc. (FINL) this afternoon. The branded athletic footwear retailer would love to be in Nike’s shoes but is instead being carried out feet first after a tumble of more than 10% in an exceptionally strong market. Its severe case of athlete’s foot is due a second-quarter earnings miss, coming in at $16.8 million or $0.31 on an earnings per share basis. This fell considerably short of consensus analyst estimates calling for $0.35 and is attributable to a shortage of important product over the spring and early summer. Lean and mean inventories are all well and good but customers will literally vote with their feet if their favorite pair of Skechers (SKX) or K-Swiss (KSWS) sneakers aren't in stock. Today’s decline may seem excessive but shares were overdue a pullback after surging some 50% in the previous 12 months. Wedbush analyst Camilo Lyon isn't alone in reassessing both estimates and price objective.
Apparently investors can no longer Depend on Kimberly-Clark Corporation (KMB), which could certainly use some Huggies at the moment. The consumer products giant, which also makes Kleenex tissues and Cottonelle toilet paper is, if not quite going down the drain, certainly off in an otherwise up market after being cut by Credit Suisse this morning. An expensive valuation was cited with the stock near a one-year high. Analyst C. A. Dillon III has also had second thoughts because “higher pension costs could at least offset positive currency moves, particularly in 2011.” Moreover Friday’s go-go market is seeing investors rotate out of more staple sectors as they chase growth. However, an ample dividend yield of about 4% could soon entice investors again especially if October lives up to its scary history once more -- see 1929, 1987, etc. Kimberly Clark’s products are bare necessities, after all. Unless of course you're Sheryl Crow. The multimillionaire songstress may spare no expense in order to Soak Up the Sun but she is considerably less lavish when it comes to loo roll. Check out Is Email Killing Your Bathroom Experience? and Six Unsexy-But-Profitable Brands.
No positions in stocks mentioned.
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