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Nike research

The Company on this research is NIKE.....Everything on this research need to be from Nike the shoe company...

Write a very brief introduction indicating why you chose this particular company. Provide a brief summary of the company's history and the type of business and industry it is in. Analyze the company's operations and forecast for the next 3 to 5

a. fiscal years' sales and earnings AND STOCK PRICE.

Obtain each of the company's various reports. You can call the company's treasurer or investor relations office and ask for the reports. Read each report and briefly analyze the company on the basis of these reports. Available reports may include the Annual Report, 10K, Quarterly Report (10Q), Prospectus, Proxy Statement for Annual Meeting, Press Releases and Financial Analysts' Reports.

4. Obtain current reports in Value Line (basic & expanded volumes), Moody's S&P's and from a securities brokerage firm. Read and analyze each report. What is YOUR analysis of the company based on reading the reports? Does your opinion of the company differ from the reports? What accounts for the difference? Your conclusions based on your analysis is most important.

5. Keep daily or weekly stock prices on your company for nine weeks. Also keep track of a stock index--Dow Jones Index, NYSE Index or S&P 500 Index for the same period. At the end of the nine weeks, calculate the rate of return on the stock and on the Index over the period.

6. BE BRIEF, CONCISE, TO THE POINT. In order to make a forecast of next year's sales, earnings and stock price you will have to answer the following questions or consider the following issues AT A MINIMUM:

7. What is the company's RISK? What does the beta tell you

a. about the riskiness of the stock? How does the company's

b. beta compare to the beta of other companies in the industry?

c. Value Line?

8. What type of stocks, bonds, options and warrants does the

a. company have? Give specifics--class, date, maturity, coupon

b. rate, outstanding volume, authorized, etc. What are the

c. ratings of the bonds?

9. What kind of capital structure does the company have (Debt

a. to Equity %)? Can you tell whether it is typical of the

b. industry or different? Has the company ever been in a

c. Why, and what was the outcome?

d. What was the capital structure before and after Chapter 11?

10. Various ratios relate the internal performance of the firm

a. to the external judgment of the market place in terms of

i. value.

b. What is the book value and market value of the company?

c. What is the price-to-book ratio of the company?

i. What is the price-to-market ratio of the market?

ii. Check Value Line publication in library?

d. Do a trend analysis (five years) of at least five

1. important ratios.

ii. Analyze the company's liquidity and profitability position.

iii. Do a trend analysis (five years) of the sales, earnings & price of the company.

e. From the above, compare the most recent year's ratios

i. for your company to the ratios for the industry.

ii. How does the company compare? Is this good or bad?

11. Does the company pay a dividend?

a. If so, what has been the growth rate?

b. Does the company have a dividend reinvestment plan?

c. What is the company's past history of dividends?

d. Is there a trend?

12. Has the company ever had stock splits or stock dividends?

a. If so, what was the probable reason?

b. Check the Value Line graph.

13. Does the company have treasury stock?

a. How Much?

b. Check the balance sheet.

14. Has the company ever been involved in merger activity?

i. What transpired?

15. What are the amounts of the top salaries for the executive officers?

a. Is there a relationship between the top executive's salary, the number of years he has been with the firm and the number of shares of stock that he own?

b. Do you think the number of shares he owns seem high or low? Discuss.

c. What percentage of shares are owned by insiders?

d. Check Value Line.

16. Find two current articles on the company in Forbes, Fortune,

a. Business Week, The Wall Street Journal, Barrons or The Economist. Briefly

b. summarize the two articles in your report.

17. Obtain a copy of a research report on your company. It is generally available from one of the retail security brokerage firms. You may have to call the brokerage firm's research department.

Solution Preview

NIKE is the world's #1 shoemaker and controls over 20% of the US athletic shoe market. The company designs and sells shoes for a variety of sports, including baseball, cheerleading, golf, volleyball, and wrestling. NIKE also sells Cole Haan dress and casual shoes and a line of athletic apparel and equipment. In addition, it operates NIKETOWN shoe and sportswear stores, NIKE factory outlets, and NIKE Women shops. NIKE sells its products throughout the US and in about 200 other countries.

Please see the attachment for the names of the top executives.

NIKE is the world's #1 shoemaker and controls over 20% of the US athletic shoe market. The company designs and sells shoes for a variety of sports, including baseball, cheerleading, golf, volleyball, and wrestling. NIKE also sells Cole Haan dress and casual shoes and a line of athletic apparel and equipment. In addition, it operates NIKETOWN shoe and sportswear stores, NIKE factory outlets, and NIKE Women shops. NIKE sells its products throughout the US and in about 200 other countries.

Image-savvy NIKE sells its products through about 18,000 retail accounts in the US and through independent distributors and licensees in other countries. Subsidiaries include Cole Haan (dress and casual footwear), Bauer NIKE Hockey (hockey equipment), Hurley International (sports apparel for skateboarding, snowboarding, and surfing), and Converse (classic and retro-style shoes including the Chuck Taylor brand). In 2004 it purchased athletic apparel and footwear makers Official Starter Properties and Official Starter LLC. It plans to bundle the brands into a new unit called Exeter Brands Group, based in New York City. The new group will develop brands in discount retailers such as Wal-Mart and Target.

As the company continues to be image-conscious, it is rethinking some of its long-standing agreements with retailers, particularly during the retail industry's consolidation push in 2005. As Sears and Kmart begin to polish its own image as a combined entity (as of early 2005), Nike decided effective October to no longer sell its products in Sears stores nationwide. Sears carries competitor brands: New Balance, Reebok, Adidas, and Skechers.

While keeping its branding in check, Nike's also honing in on active female customers, particularly in 2005. It became fully committed to women in 2000, when the firm began making its women's shoes using molds made from women's feet. It had been using molds made from a small man's foot. The company followed up by expanding its apparel in fashionable colors and by rolling out trendy low-rise workout pants. Being known as a brand that caters to men (its "Be Like Mike" ad campaign) and as one that supports athletes who take performance and sports seriously, Nike is focusing more on women who want workout fashion. While Nike has experienced failed attempts to capture the attention of this target segment, the firm has reworked its organizational, product, and marketing strategy to get there this time around. The plan involves expanding its Nikewomen brand with a catalog and Web site redesign. It also anticipates operating a dozen Nikewomen stores in the US by mid-2006.

Like most clothing and footwear makers, NIKE is vulnerable to the moods of a fickle teen market. In the mid-priced shoe segment, brands such as Skechers have cut into the company's market share. Following the success of NIKE-sponsored golfer Tiger Woods, NIKE has developed a set of golf clubs and unveiled a Tiger Woods apparel line. In addition, the company -- which relies on contract manufacturers -- has taken steps to avoid more criticism of human rights violations in its factories.

In 2004, less than a year after entering the market, NIKE closed all of its Paris operations because of difficulties with its French franchise operator. The closures do not affect NIKE's otherwise healthy European expansion, including store openings in Barcelona, Hamburg, Lisbon, Madrid, and Milan, among others. The company altered the name of its women's stores, broadening the name from Goddess (taking on the original meaning of "Nike") to Nikewomen. Late 2004 saw the inaugural shipment of the company's first women's catalogue, also named Nikewomen.

Co-founder Philip Knight announced in November 2004 he would step down as President and CEO, though he will continue as Chairman of the company. Former S.C. Johnson & Son chief William Perez was tapped as Knight's successor.

HISTORY:

Phil Knight, a good miler, and Bill Bowerman, a track coach who tinkered with shoe designs, met at the University of Oregon in 1957. The two men formed Blue Ribbon Sports in 1962 in an effort to make quality American running shoes. The next year they began selling Tiger shoes, manufactured by Japanese shoe manufacturer Onitsuka Tiger. They sold the running shoes out of cars at track meets.

The company became NIKE in 1972, named for the Greek goddess of victory. The NIKE "Swoosh" logo was designed by a graduate student named Carolyn Davidson, who was paid $35. The same year NIKE broke with Onitsuka in a dispute over distribution rights.

At the 1972 Olympic Trials in Oregon, Knight and Bowerman persuaded some of the marathoners to wear NIKE shoes. When some of these runners placed, the two advertised that NIKEs were worn by "four of the top seven finishers."

Bowerman tested a new sole in 1974 by stuffing a piece of rubber into a waffle iron. The result was the waffle sole, which NIKE added to its running shoes. NIKE grew as running's popularity surged in the 1970s. (NIKE even offered a red-and-silver shoe for disco dancing.) By 1979 it had 50% of the US running shoe market. NIKE went public the next year.

NIKE expanded with shoes for other sports, introducing the Air Jordan basketball shoe in 1985 (named for basketball star Michael Jordan) and the Cross Trainer two years later. NIKE's famous "Just Do It" slogan was introduced in 1988, the same year it bought dress-shoe maker Cole Haan.

In 1992 NIKE opened its first NIKETOWN store. It acquired Canstar Sports, which included hockey equipment maker Bauer, in 1995 (now Bauer NIKE Hockey). NIKE signed 20-year-old golf phenom Tiger Woods to a $40 million endorsement contract that year. Also in 1995 NIKE acquired a license to place its logo on NFL uniforms. (Reebok took over this license in 2002.)

NIKE launched a Jordan-branded athletic footwear and apparel division in 1997. Prompted by falling sales in Asia, NIKE cut 1,200 jobs in 1998 (about 5% of its workforce) to cut costs. With demand for athletic shoes weakening, in 1999 NIKE reported its first drop in sales since 1994. Also in 1999 the company began opening JORDAN store-within-a-store boutiques. Bowerman died in 1999; NIKE released a line of running shoes in his honor.

In 2000 the company launched a line of athletic electronics, including MP3 players, heart monitors, and two-way radios. A full year before Tiger Woods' contract expired, NIKE in 2000 signed the golfer to a five-year contract. The company said the new contract represented a "substantial raise" from his previous $40 million deal.

NIKE opened its first NIKEgoddess store in Newport Beach, California, in October 2001. The company acquired Hurley International, a distributor of action sports apparel, in April 2002.

In September 2003 NIKE acquired competitor Converse and left it as a separate operating unit to keep the Converse name intact. In October Bauer NIKE Hockey announced the closing of its hockey stick factory in Ontario and a staff reduction at its Quebec facilities.
MARKETS:

NIKE sells its products in approximately 200 countries, operates 336 retail outlets (161 in the US and 175 outside the US), and utilizes independent contractors in about 35 countries with distribution centers in Africa, Asia, Australia, Canada, Europe, Latin America, and the US.

Please see the attached table:

Selected Products

Athletic Shoes
Aquatic
Auto racing
Baseball
Basketball
Bicycling
Cheerleading
Cross-training
Fitness
Football
Golf
Running
Soccer
Tennis
Volleyball
Wrestling
Athletic Wear and Equipment
Accessories
Athletic bags
Bats
Caps
Fitness wear
Gloves
Headwear
Jackets
Pants
Running clothes
Shirts
Shorts
Skates
Skirts
Snowboards and snowboard apparel
Socks
Sport balls
Timepieces
Uniforms
Unitards
Selected Subsidiaries

Bauer NIKE Hockey Inc. (hockey equipment and in-line skates)
Cole Haan Holdings Inc. (footwear and accessories)
Converse (footwear)
Hurley International LLC (action sports apparel)
NIKE IHM, Inc. (plastic products)
NIKE Team Sports, Inc. (headwear and licensed team logos)

Please see the attached figures.

* * * * * * * * * * SECURITIES INFORMATION * * * * * * * * * *
EXCHANGE: NYSE
CURRENT SHARES OUTSTANDING: 263,100,000
STOCK PRICE:
2004 FISCAL YEAR HIGH: $78.56
2004 FISCAL YEAR LOW: $49.60
2004 FISCAL YEAR CLOSE: $71.15
EPS: $3.51
DIVIDEND PAYOUT: 19.4%
DIVIDEND YIELD: 1.0%
DIVIDEND PER SHARE: $0.68
PRICE/EARNINGS HIGH: 22
PRICE/EARNINGS LOW: 14
BOOK VALUE PER SHARE: $18.17
HISTORICAL STOCK INFORMATION:
, 2003, 2002, 2001
Fiscal Year High, $57.85, $64.28, $60.06
Fiscal Year Low, $38.53, $40.33, $34.81
Fiscal Year Close, $55.99, $53.75, $41.10
Price/Earnings High, 21, 26, 28
Price/Earnings Low, 14, 16, 16
Earnings, $1.77, $2.44, $2.16
Dividends, $0.52, $0.48, $0.48
Book Value per Share, $15.14, $14.43, $13.01
Please see attached table:
SUBSIDIARIES:
Bauer NIKE Hockey Inc.
Cole Haan Holdings, Inc.
Converse Inc.

NINE WEEK CALCULATION OF RATE OF RETURN.
Source of data, please see the charts in the attachment.
NIKE (82 - 85)/ 82 = 3/82 X 52/9 x 100 = 21.14% .This is the annualized return.
DOW JONES = (82 -81) /81 = 1/82 = 52/9 X 100 = 7.05%.

SALES PROJECTION
Based on 2002 - 2004 figures = (12253,1 - 98930)/2 = 12253,1 +1211,55 = 13464.65 This is the projection for 2005-08-08

EARNINGS PROJECTION
2002 -2004 = (945.6 -663.3) = 945.6 +141.15 = 1086.75.

STOCK PRICES
2001 -2003 HIGH = 60.6 -57.85 = (-2.75) 57.8 - 2.75 = 55.05. forecast for 2005.
2001 - 2003 LOW = 38.53 - 34.81 = 38.53 + 3.72 = 42.25.

NIKE BETA IS:
0.85 SO currently Nike is not a high risk company.
Addidas Salomon is having a beta of 0.09 that is almost a risk free company.
REEBOK is having a beta of 0.92 that is slightly higher than that of NIKE.

NIKE, Inc. designs, develops and markets footwear, apparel, equipment and accessory products. NIKE sells its products to retail accounts and through a mix of independent distributors, licensees and subsidiaries in over 120 countries around the world. Virtually all of the company's products are manufactured by independent contractors.

The company's athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. As of July 2004, running, basketball, children's, cross-training and women's shoes were NIKE's top-selling product categories and the company expected them to continue to lead in product sales in the near future. However, NIKE also markets shoes designed for outdoor activities, tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, hiking, and other athletic and recreational uses.

The company sells active sports apparel covering most of the aforementioned categories, athletically inspired lifestyle apparel, as well as athletic bags and accessory items. NIKE apparel and accessories are designed to complement the company's athletic footwear products, feature the same trademarks and are sold through the same marketing and distribution channels. NIKE also markets apparel with licensed college and professional team and league logos.

The company sells a line of performance equipment under the NIKE brand name, including sport balls, eyewear, skates, bats, gloves, and other equipment designed for sports activities. It also has agreements for licensees to produce and sell NIKE brand swimwear, women's sports bras, cycling apparel, maternity exercise wear, children's clothing, school supplies, timepieces, and electronic media devices.

Through wholly-owned Cole Haan Holdings Inc., the company sells a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan, g Series, and Bragano.

Wholly-owned Bauer NIKE Hockey Inc. manufactures and distributes ice skates, skate blades, in-line roller skates, protective gear, hockey sticks, hockey jerseys, licensed apparel and accessories under the Bauer and NIKE brand names.

Wholly-owned Hurley International LLC designs and distributes a line of action sports apparel for surfing, skateboarding, and snowboarding, and youth lifestyle apparel and footwear, under the Hurley brand name.

Nike 4.8% MEDIUM TERM NOTES; Due July 9, 2007.

(S&P Rating A+; at June 27, 2005)

Amount Offered............................................25,000,000
Outstanding...............................................25,000,000
ORIGINALLY ISSUED July 8, 2002.

INTEREST PAYABLE June and December 1st.

BOND FORM - Book-Entry.

SECURITY - A direct unsecured obligation.

TRADED - OTC

2004 106.85 102.53 2003 106.75 101.98
2002 105.30 98.66
Nike 5.375% MEDIUM TERM NOTES; Due July 8, 2009.

(S&P Rating A+; at June 27, 2005)

Amount Offered............................................25,000,000
Outstanding...............................................25,000,000
ORIGINALLY ISSUED July 8, 2002.

INTEREST PAYABLE June and December 1st.

BOND FORM - Book-Entry.

SECURITY - A direct unsecured obligation.

TRADED - OTC

2004 108.34 102.48 2003 111.22 103.47
2002 106.56 97.50
Nike 5.66% MEDIUM TERM NOTES; Due July 23, 2012.

(S&P Rating A+; at June 27, 2005)

Amount Offered............................................25,000,000
Outstanding...............................................25,000,000
ORIGINALLY ISSUED July 23, 2002.

INTEREST PAYABLE June and December 1st.

BOND FORM - Book-Entry.

SECURITY - A direct unsecured obligation.

TRADED - OTC

2004 106.85 99.81 2003 110.22 99.65
2002 106.68 100.00
Nike 5.4% MEDIUM TERM NOTES; Due August 7, 2012.

(S&P Rating A+; at June 27, 2005)

Amount Offered............................................15,000,000
Outstanding...............................................15,000,000
ORIGINALLY ISSUED August 7, 2002.

INTEREST PAYABLE June and December 1st.

BOND FORM - Book-Entry.

SECURITY - A direct unsecured obligation.

TRADED - OTC

2004 105.09 98.12 2003 108.70 98.19
2002 105.08 99.56
Nike 5.15% MEDIUM TERM NOTES; Due October 15, 2015.

(S&P Rating A+; at June 27, 2005)

Outstanding..............................................100,000,000
ORIGINALLY ISSUED October 24, 2003.

INTEREST PAYABLE April and October 15th.

BOND FORM - Book-Entry.

SECURITY - A direct unsecured obligation.

TRADED - OTC

2004 104.19 95.08 2003 101.38 98.47

* * * * * * * * * * * * * * * * STOCK DATA * * * * * * * * * * * * * * * *

CLASS A CONV. COM. & CLASS B COM., both no par, share ratably in dividends and in any liquidation of assets. CONVERTIBLE, Cl. A into Cl. B share-for-share. VOTING POWER- Cl. A & B have one vote per share on all matters. However, when Cl. B stock constitutes 10% or more of the Com. stock outstanding, holders of Cl. B, voting separately, will elect a minimum of one director and such larger number of directors (not exceeding 25% of the total board and rounded up to the nearest whole number) which in ...

Solution Summary

Nike research is presented thoroughly.

$2.19