Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Stock Showdown – Nike Inc (NKE) Vs. Under Armour (UA): Which Is The Better Buy?

Page 1 of 2

Nike Inc (NYSE:NKE) has had a nice run over the last 12 months, climbing 38% over that time. The stock now trades at its 52-week high and has reached a rich valuation. Nike’s trailing P/E is 30 and its forward P/E is 27.6. In comparison, the S&P 500 trades at a trailing P/E of 19.4 and a forward P/E of 18.6. Still, Nike is cheaper on a relative basis than its competitor, Under Armour Inc (NYSE:UA). Under Armour trades at trailing and forward P/E multiples of 88 and 58, respectively. Both companies trade high looking out even further, but Nike still trades relatively lower on a PEG basis. Nike’s PEG ratio is 2.24, while Under Armour Inc (NYSE:UA)’s is 3.2. Any way you cut it, both companies are expensive when considering the valuation metrics explored here.


Insider activity at Nike has been routinely characterized by the exercise of options followed by the selling of those shares. No major acquisitions or dispositions have occurred in the last couple of months, but Jeanne Jackson, Nike Inc (NYSE:NKE)’s President of Product and Merchandising, sold 16,000 shares in June after exercising options for the same amount. Save for 790,000 shares acquired by insiders through non-open market transactions, selling has predominated insider activity in the shares of Under Armour. The most significant recent insider selling in Under Armour occurred back in April when insiders sold 420,000 shares.

Studies show that insider trading can produce alpha. While there are many reasons why an insider would sell, there is only one reason why an insider would buy. Academic research shows that certain insider purchases have outperformed the market by an average of 7 percentage points per year. Another way to beat the market is by following the small-cap stock picks of hedge funds. Our research shows that the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month on average between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012 and they’ve continued to excel, returning more than 142% over the ensuing 2.5 years and outperforming the S&P 500 Index by over 83 percentage points (read the details here).

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!