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Previous Post (18 January): Reviewing Nike, This Is What I See
You've probably seen news around Nike's recent underperformance.
You've probably also seen newer brands making waves in the athleisure community.
Can I show you something different?
Something which you may not have come across?
An angle you may not have considered?
The chart below is a ratio or relative chart of Nike compared to the S&P 500 Index which extends back 40 years to 1984. In the lower panel, the blue/red line represents the ratio's distance versus the 200-week simple moving average. At current levels, the extension is 54%, which is well below historical norms and in line with the extensions seen in March 2000 (also -54%) and October 1984 (-56%). These prior extensions represented coincided with a share price that had severely underperformed the S&P 500 Index however, subsequently reversed it's underperformance to develop a new bull trend. At current levels, the reward-to-risk appears appealing a for a buy/long position within a medium to long term portfolio.
Let me know your thoughts.
Lester Davids
Analyst: Unum Capital
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