Skip Nike shares during World Cup mania

Analysts say that historically, the company's stock price peaks heading into the tournament and then falls.

By MSN Money Partner Jun 6, 2014 1:33PM
© Lucy Nicholson/Reuters
A Nike Soccer ballBy Ciara Linnane, MarketWatch

Investors should avoid buying Nike (NKE) in the months leading up to the World Cup, and then start buying them about two to three months after the soccer tournament has ended, Canaccord analysts said Friday. 

They reached that conclusion after studying Nike's share-price performance in previous World Cup years, going back to 1990. 

"NKE's stock has typically peaked in April/May heading into the World Cup then trades off through it, usually troughing in the August/September time frame," they wrote in a note. 

On average, that peak-to-trough move has been 23.7 percent, or 910 basis points worse than the Standard & Poor's 500 Index ($INX), and is followed by a rebound of 37.2 percent, or 2,100 basis points better than the S&P 500, from that point to year-end. 

"We believe the wide swings in NKE's stock in World Cup years are exacerbated by heightened sales expectations and/or forward year guidance that end up disappointing," they said. 

Canaccord views current analyst estimates for 2015 as too high, and said they will need to reset lower. Nike shares were slightly higher in premarket trade. 2014 FIFA World Cup play begins June 12 in Sao Paulo.

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Tags: NKE
4Comments
Jun 7, 2014 11:21PM
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Always go against, the people that might be in the know...?


You know the big traders, analysts, money managers, millionaires and billionaire Investors...


Get back to me in 20 years, And tell me how that worked out for ya...

Jun 7, 2014 5:00PM
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If Analysts say do NOT buy NKE , then go ahead and BUY now . Always do the opposite of what analysts say if you want to become rich...
Jun 6, 2014 1:58PM
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I think I shall just skip the World Cup altogether.
Jun 7, 2014 5:03PM
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NKE is now one of the DOW 30 for a good reason. NKE stock price will be moving up slowly but surely...
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