Nike Represents a Strong Risk-Reward Trade Opportunity

about 1 month ago

Sven Carlin

"Good day fellow investors. Nike already looks like a good risk and reward stock to buy now. But the question here as we are value investors is when it is an extremely strong buy with a margin of safety. We are getting closer to that perhaps even already there. If they go back to five billion from the current three billion in net income times a P ratio of 30, that's already 60% up. However, from that perspective, strong buy, we have a 2x minus 20% as the maximum downside."

The speaker outlines an actionable trade call for Nike (NKE), emphasizing its attractive risk-reward profile and margin of safety. With current net income at three billion and potential to reach five billion, the stock could see a 60% upside based on a 30 P/E multiple, while limiting downside risk to 20%. This positions Nike as a strong buy for value investors seeking both relative and absolute investment merits.

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