dimanche 27 juin 2021

Nike: Never sell a good asset

Last thursday, Nike (NKE) results were out and, holy fuck, they were amazing.

For the last quarter, EPS raised to 0,93$ from -0,51$ the year before. These 0,93$ EPS beat the 0,51$ estimates by 82%. It's phenomal, tabarnac.  

Not so hard to go from negative to positive. But let's take a look at quarterly EPS over the last 10 quarters:

2018-11: 0,52$
2019-02: 0,68$ 
2019-05: 0,62$
2019-08: 0,86$
2019-11: 0,70$
2020-02: 0,53$
2020-05: -0,51$
2020-08: 0,95$
2020-11: 0,78$
2021-02: 0,90$
2021-05: 0,93$

If we compare may 2021 to may 2019 (thus, we exclude 2020 which was a year of panic), the EPS went from 0,62$ to 0,93$, an increase of 50% over two years. It's incredible for a 240B$ company that sells shoes. 

It means that Nike managers have exceptional skills to drive their business.

Friday, the stock was up 15%. It's very big surge. But is Nike expensive?

At current price, Nike is sold for about 30 times next year's earnings. It's not cheap, but for such growth, such predictable earnings, a ROE of 55 and such a dominant business, I would say that its a fair price. Plus, the estimates for years to come are exceptional. 

In the recent months, I sold some NKE shares, thinking that this year would be difficult for them. I was wrong. And today, a Stephen Jarislowsky quote came to mind:

"Never sell a good asset". 

Aucun commentaire:

Enregistrer un commentaire