While uncertainty has been weighing on the stock market, great companies can continue to deliver, no matter what the economy or latest fears are doing. Quality results and returns speak for themselves.
It’s even easier when a company has strong demand for its products and is a leader in its industry. That makes it ideal to buy during periods of market fears.
Case in point? Nike (NKE). The sports apparel company is continuing to demonstrate that it’s a global powerhouse. In its most recent earnings, the company reported 83 cents per share, up from 78 cents a year ago, and far higher than analyst expectations of 63 cents per share.
Shares are about 10 percent off their all-time highs thanks to the recent market decline. That may create a decent entry point for investors and traders. Shares are hardly cheap, trading at over 45 times forward earnings. But as an industry-leading player, shares will likely continue to rise over time, and growing earnings should improve the company’s valuation.
Action to take: Investors may like shares for the long haul. Nike is a dividend growth play, although the current starting yield is a bit low at just under 0.7 percent.
For traders, the March $175 calls, last going for about $4.30, could move higher if shares head back to their all-time highs. Traders can likely nab mid-to-high double-digit returns on a rebound in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.