Just Do It
02/19/2016 7:00 am EST
Instead of getting caught up in the stock market’s depression, you are better off ignoring the market and looking at the individual companies in your portfolio and deciding if you really want to own them, asserts Neil Macneale, editor of 2-for-1 Stock Split Newsletter.
Have patience, don’t be scared, and don’t get depressed. In the case of our model portfolio, all 30 companies are still making money and, for the most part, continue to exhibit the stock split advantage.
Meanwhile, we are once again faced with the complete absence of new split announcements from which to select a candidate for our monthly addition to the 2 for 1 Index.
Instead of skipping the monthly addition to the portfolio, I revisited several companies that have been considered in recent months.
As a result, I am choosing Nike (NKE) for one important reason, it has dropped in price by about 13% since it first appeared on our split list last November.
Several of the metrics used to evaluate our candidates have adjusted significantly as a result of the market decline and, in the case of NKE, the stock is far more attractive now than it was over the last few months.
Nike makes shoes. Everybody knows that and long-time readers may also know of my aversion to fad apparel and fashion companies.
However, Nike is not a fad company. This is a huge business with a market cap around $100B.
Nike is one of the world’s best-known brands, selling shoes, apparel, and equipment for every sport imaginable, along with more generic outdoor clothing and gear.
NKE has grown earnings at over 14% per year for the last five years, has a very strong balance sheet, pays a respectable dividend, and is quite a bit less volatile than the market.
All of this was true last month and the month before, but the stock was just too expensive to earn a good score in the rankings. This is no longer true and Nike will be added to the portfolio early next week.
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