Stocks in the News: Nike Running Well

Posted: Jun 29, 2013 12:01 AM

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis. 

Stock number one is: 

Nike Inc., (SYMBOL: NKE) and the headline says:

Nike's Earnings Beat Estimate – Zacks

Nike Inc. reported fourth quarter sales, earnings, and global futures which beat Wall Street estimates.  Product innovation and sports events are driving top-line growth in most geographic regions.  Citi Research commented on high cash balances, saying “we think management could be ready to accelerate share repurchases and/or dividend increases.”

Earnings are expected to grow another 13-15% in each of the next two years.  The PE is 20.4 and the dividend is 1.4%.

We urged investors to buy NIKE twice in March.  The stock then rose 20%.  The new trading range is $59 to $66.

Our Ransom Note trendline says:  BUY NIKE BELOW $62.

Stock number two is: 

Research in Motion, (SYMBOL: BBRY) and the headline says:

BlackBerry Plunges After Smartphone Maker Reports Loss -- Bloomberg

Research in Motion, maker of BlackBerry smartphones, reported a first quarter loss on lower than expected unit shipments, service revenues, and gross margins.  The stock is down substantially today, after the Street expected a profitable quarter.

The new BlackBerry 10 sales are doing well, and the company may earn a small profit in fiscal 2014 after losing money in the first two quarters, but is expected to lose money again in 2015.

On March 25 and June 18, we said SELL, due to projections of falling revenues and net losses.

Our Ransom Note trendline says: SELL RESEARCH IN MOTION.

Stock number three is:

Accenture PLC, (SYMBOL: ACN) and the headline says:

Accenture's Third Quarter Earnings Beat, Revenues Miss – Zacks

Accenture PLC, the world’s second-largest technology-consulting company, disappointed Wall Street with flat third quarter sales.  U.S. revenue growth was up 7%, but international was weak.  Earnings were a little higher than expected, driven by good  operating margins.

"Bulls can focus on strong increases in new contracts in the recent two quarters; and share buybacks of approximately $1.4 billion are seen in the recent and next quarters.  Annual earnings growth is being revised down to about 9% this year.

The stock lost all of this year’s gains today, and will likely find support in the low $70’s.  It’s too late for fair-weather investors to sell on today’s stock overreaction.

Our Ransom Note trendline says:  HOLD ACCENTURE