Going forward, Nike has plenty of new opportunities and challenges. Oregon politicians have provided the firm with an effective promise that its tax treatment will not be changed, but China is starting to slow down. Brands are under pressure from Under Armour Inc (NYSE:UA), but product innovation, like Flyknit, are winning back customers.
Compared to Under Armour Inc (NYSE:UA), NIKE, Inc. (NYSE:NKE) looks undervalued despite its recent bull run. The latter trades at a respective 25.3 times past and 18.2 times forward earnings versus corresponding figures of 52.4 times and 32.7 times for the former. While Under Armour Inc (NYSE:UA) is forecasted for a 1,050-basis-point growth rate increase, I would lean more towards cheap investments to capitalize off an improving consumer sentiment.
NIKE, Inc. (NYSE:NKE) and Aeropostale Inc (NYSE:ARO) have both slipped in recent quarters. However, they still maintain leading brands that are poised for further commercialization with consumer confidence improving. Both companies may not be the best investments right now, but they hold value as buy-and-hold stocks given the timelessness of their brands.
The article Two Consumer Goods Stocks That Slipped originally appeared on Fool.com and is written by David Gould.
David Gould has no position in any stocks mentioned. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. David is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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