When to Buy Nike? Just Do It

NEW YORK (TheStreet) -- Chasing Nike (NKE) in the footwear business has been like chasing one's own shadow. This is what rivals like Reebok and Adidas (ADDYY) have learned over the past several decades.

But with Nike stock still coasting near 52-week highs, the more pressing question these days is whether investors should chase the shares. Nike stock closed Tuesday at $79.64, up 1.6% on the year. But the shares are up 13% since February.

Since Nike's strong fiscal second-quarter results were announced in December, there has been a sense of "nothing can stop us now." Among other difficulties, the company has weathered the storm of brutal economic conditions in China, which has impacted its growth.

Amid all of this, the biggest surprise was how the company's rivals like Under Armour (UA) fumbled the ball. They missed an opening to finally exploit a Nike weakness. That opportunity didn't last long.

Nike management worked hard to reduce the company's inventory. This is while they adjust the company's focus to new consumer buying trends around the globe.

Today, the company has reclaimed its lead in areas like marketing and product development. This has translated into strong share gains, revenue, and profits. Investors are wondering if there was ever a slowdown.

Although these shares aren't cheap at 25 times trailing earnings, investors may never get another opportunity to buy lower. For that matter, given the quality of the company's management and Nike's market-share lead, these shares never fall far below their fair market value. And waiting may cost even more.

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