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Good Luck Chasing Nike

NEW YORK ( TheStreet) -- We hear stories all the time from investors expressing regret about "missing a run" in a stock. This is often a painful situation where we're reminded how clear the review mirror is.

But I've learned this lesson long ago. I don't expect "what ifs" will cease to be a part of the investment process anytime soon. But this still doesn't make me feel better about my decision last year to wait on Nike (NKE - Get Report).

More than once I've had an opportunity to jump in on this stock at much cheaper levels and I didn't "do it." This was prior to the company enacting a 2-for-1 stock split last December. As with rivals Under Armour (UA) and Adidas (ADDYY), I've spent the past year thinking that Nike's struggles in China would set the company back. In my case, I figured it would present an opening to buy lower. I was wrong.

Remarkably, since Nike reached a pre-split low of $89.65 ($44.82 adjusted) per share on Nov. 14, the stock has surged more than 40%, including gains of 25% year-to-date. After the company's strong close to its fiscal year, during which fourth-quarter results beat on both the top and bottom lines, I don't see shares of Nike getting cheap anytime soon.

The company posted 7% growth in revenue, which was roughly 2% higher on a constant currency basis. Growth was led by an 8% year-over-year increase in footwear, while apparel sales surged 20%. I've always believed that Nike was underrated in this category. Despite the strong showing in apparel, I still believe Nike management has room to add some serious pressure on Lululemon (LULU) if it wanted.

Nike is also doing well with its direct-to-consumer business, which grew 16%, helped by a strong 11% jump in North American same-store-sales for Nike-owned stores. I don't want to understate how impressive of an accomplishment this is, especially given the global economic headwinds that we've seen.
[Read: <a target="blank" data-add-tracking="true" href=""><em>Yelp Jumps on Delivery Rollout</em></a>]

The fact that this company has now posted 14 consecutive quarters of double-digit same-store sales growth in North America is a marvel. Again, I can't say that I'm surprised. But I've also been waiting for Nike to trip. It hasn't. Given the 8% increase in Nike's futures orders, with by 12% growth in North America, there are no meaningful signs of slowing down. This is even with areas such as Western Europe and China posting flat futures.
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