AvaTrade – Nike Stock
Headquartered in Oregon, Washington, Nike was founded on the 25th of January 1964 by Phil Knight and Bill Bowerman. While the company has now grown to virtually become the world’s largest sports apparel and equipment seller, it started simply as one man’s dream for better shoes.
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Phil Knight had seen how Japanese cameras (Nikon and Canon) had replaced their German counterparts in the US and imagined the same scenario for the then-dominant German shoes, Adidas and Puma. In a visit to Japan, Phil met shoemaker, Onitsuka Tiger, and they formed a hypothetical company, Blue Ribbon Sports, which landed an exclusive agreement to distribute the Tiger Japanese shoes in the US. Phil, together with his co-founder Bill, later incorporated Blue Ribbon Sports (BRS) and started aggressively distributing Tiger shoes in the US.
By 1971, BRS broke up with Onitsuka Tiger and sought to set its own production line with independent contractors. It was the same year that the Nike name and the trademark ‘swoosh’ logo would be introduced, just in time for the 1972 Munich Olympics. The name Nike is a reference to the ancient Greek goddess of Victory, and in 1972, the company made its first steps towards international success and recognition. A series of strategic marketing and international expansion campaigns catapulted Nike to become the world’s biggest seller of athletic footwear, apparel, equipment, accessories and services.
Some of their memorable marketing messages include: ‘Your limit is only you’; ‘If you have a body, you are an athlete’; ‘Train insane or remain the same’; ‘Pain is temporary, victory is eternal’; and the latest, ‘Just Do It’. Nike now operates in 6 key regions: North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets; and its product portfolio is categorised into nine groups: Running, Men’s Training, Women’s Training, NIKE Basketball, the Jordan Brand, Football (Soccer), Action Sports, Sportswear and Golf.
Nike held its IPO on the 12th of December 1980, listing on the New York Stock Exchange (NYSE), where it trades under the ticker symbol NKE.
Mergers and Acquisitions
Nike has maintained an active portfolio throughout its existence, making key acquisitions and divestitures in the process. Its major buys include: Converse ($305 million), a rad sneakers and apparel maker; Hurley International, a surf apparel maker; Celect, a cloud-based predictive analytics platform; and TraceMe, a sports technology company.
Its major divestitures include: Umbro, a sportswear and football equipment supplier; and Starter, a throwback sportswear manufacturer.
Nike Stock History
Nike went public with a price of $23 per share, and the company has had 7 stock splits since then as follows: 2-for-1 on the 7th of January 1983; 8th of October 1990; 31st of October 1995; 2-for-1 on the 24th of October 1996; 2-for-1 on the 3rd of April 1997; 2-for-1 on the 26th December 2012; and 2-for-1 on the 24th of December 2015. When adjusted for splits, Nike’s IPO price was $0.18 per share.
Nike’s price chart shows a stock that has seemingly been in eternal growth, extracting great value for its long-term investors. The stock first broke above the split-adjusted price of $10 in September 2004, embarking on a rally that printed a temporary high of circa $17 by April 2008. The trickle effects of the Great Recession welcomed the lows of circa $10 by February 2009 before the stock turned higher. The subsequent economic recovery pushed the stock to break the $20 barrier by October 2010. A multi-year rally followed that drove the stock to highs of just below $70 by November 2015, before a retracement occurred to circa $50 in November 2016. The stock has traded higher since, managing to print its all-time high of $97 in October 2019.
Nike has been a generous dividend payer. The company started paying quarterly dividends in 1984 and has increased its payouts consistently since 2004 to the current 0.22 per share in 2019. This is a clear demonstration of the success of its business, as well as the company’s commitment to increasing shareholder value.
More investors nowadays are willing to forego dividends for bigger capital gains through high stock growth. But dividends remain a distinct quality of mature, profitable companies. Nike, though, remains a high growth and dividend-paying stock that has proven its ability to provide long term returns as well as be a consistent provider of short-term income to investors. For investors that wish to gain even bigger returns, Nike also offers a dividend reinvestment plan.
Trading Nike Stock
Here is what to consider when trading the high-value Nike stock:
Tariffs and Trade Agreements
Nike contracts multiple manufacturers and has retail stores in different places around the world. This means that its bottom line remains exposed to even small tariffs and trade agreements in different jurisdictions.
Legislative or Taxation Policy
Nike operates in an industry that is largely labour intensive. This means that it is a target of various legislative and taxation threats. There is also the danger of counterfeit, cheap products that Nike undoubtedly requires active legislation to curb.
The high and fast shoe and apparel industry is becoming increasingly crowded. Major competitors such as Adidas, Under Armour and Puma, are not resting on their laurels to displace Nike from its envious top position. Nike is also actively entering the fitness technology space, which will pit it against tech giants such as Apple and Samsung.
New Product Rollout
Trends shift dynamically in the high and fast apparel industry. Nike has previously been boosted by successful new product launches in the past, such as the Air Jordan brand. New product releases have a direct impact on the performance of Nike stock.
Periodical Earnings Reports
The Nike fiscal year runs from January to December, and the company releases quarterly reports that show the business health of the company. Nike investors should assess the performance of the company in the key segments it operates in. Strong numbers will trigger demand for the stock, while weak numbers will always provide headwinds.
AvaTrade Nike Stock Trading Information
- MT4 Symbol: #NIKE
- Trading Time: Monday – Friday 13:00 – 19:59 London Time GMT
- Country: USA
- Currency: USD
- Exchange: NYSE
- Typical spread: 0.13%
- Minimum Trade Size: 10
Why Trade Nike on AvaTrade MT5
Trade Nike on the new and advanced AvaTrade MetaTrader 5 (MT5) trading platform and take advantage of the following:
- More Assets
Trade numerous other financial assets alongside Nike and other stocks. The other types of assets available on the AvaTrade MT5 platform include currency pairs (forex) such as the EURUSD, commodities such as crude oil and gold, indices such as the Dow Jones, futures, bonds, energies, ETFs, and cryptocurrencies.
- Multiple Order Types
You can place traditional buy/sell orders on Nike on the AvaTrade MT5 platform, but there are 6 other pending order types (buy stop, sell stop, buy limit, sell limit, buy stop limit and sell stop limit) to help you take advantage of even more opportunities on the stock’s price action.
- Comprehensive Analysis Tools
As of October 2019, Nike stock has been in a steady uptrend, and the AvaTrade MT5 platform has numerous technical analysis tools (21 timeframes, 38 technical indicators and 44 graphical objects) that can help you capture optimal entry points in the direction of the trend. There are also fundamental tools and resources, such as the Economic Calendar and an integrated Financial News widget, to help you take advantage of important Nike news, such as earnings reports and new product introductions.
- Hedging and Netting Allowed
AvaTrade MT5 allows hedging and netting. As of the third quarter of 2019, Nike is an appreciating stock, but traders can hedge against retracement losses by opening simultaneous opposite trades. Netting allows traders to add on to their profitable Nike positions, or decrease the position size of their losing trades.
- Leveraged Trading
Trade Nike stock on the AvaTrade MT5 platform with a leverage of 10:1. This means that a $1,000 Nike position can be placed with a margin capital of only $100.
- Automated Trading Solutions
AvaTrade MT5 supports the use of automated trading solutions when trading Nike or other available financial assets. Take advantage of the MQL5 IDE (integrated development environment) that can be accessed using your AvaTrade MT5 login credentials and access various automated trading services and resources such as MetaEditor, Multi-threaded Strategy Tester and the entire MQL5 community.
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