Yesterday, seekingalpha.com wrote an insanely fascinating and informative article about five sports apparel and retail companies to consider investing in. They focus on Adidas, The Finish Line, Foot Locker, Nike and Under Armour.
On Adidas: “Adidas enjoyed a solid 2011, with its stock price rising 23%, its quarterly revenue climbing 8 % and its earnings growing 14%. As strongly as it is trading right now, the rest of its number don’t seem to indicate a big drop in share price.”
On The Finish Line: “With a quarterly revenue growth of 8% and a 35% climb in earnings, the company appears to be a profitable option. Although its price-to-book ratio of 2.48 is a bit high, the company is debt-free and has over $216 million in total cash. With its low 14% payout ratio and a 16% return on equity, The Finish Line is a solid buy option in the retail sector.”
On Foot Locker: “The $4.26 billion company has a low total debt of $136 million, and its debt-to-equity ratio is an excellent 6.5. While its one-year target suggests a flat year for the share price, the stock has been bullish, trading almost 20% above its 200-day moving average. I believe the price will continue to rise, and I am rating Footlocker as a buy.”
On Nike: “Because of the company’s impressive marketing savvy, it capitalizes on trends like New York Knick sensation Jeremy Lin’s rise to prominence. (Nike is his only endorsement.) Moves like this are expected to help the company maintain its dominance in the sector; they also make Nike a solid buy on Wall Street.”
On Under Armour: “Although there is some concern about investors holding over 13% of the company’s float in short positions, the numbers seem to stack up in favor of continued positive results. I am impressed by what Under Armour has accomplished, and I rate the company a buy at the current time.”
There’s much more information on each company in the article. I encourage you to check it out. Even if you aren’t an investor at the moment, this is valuable information about the business behind the sports apparel business.