Best Growth Stocks for Retirement: Nike (NKE)
I’m the first to admit that I’ve consistently underestimated Nike Inc (NYSE:NKE) over the years. As ridiculous as this sounds now, I thought Michael Jordan’s retirement in 1998 — nearly 20 years ago — would stunt the brand’s momentum. (We’ll all just agree to forget that Jordan came out of retirement in the early 2000s to play for the Washington Wizards. That never happened.)
Nike’s sales did indeed slow down for a couple years. But by the mid-2000s, NKE was growing faster than ever, and it has yet to really slow down.
I also thought upstarts like Under Armour Inc (NYSE:UAA) and Lululemon Athletica Inc. (NASDAQ:LULU) would eat into Nike’s growth and depress margins. That very well may happen at some point, but it certainly hasn’t happened yet. Nike’s return on equity is sitting at multidecade highs.
I have no idea what the economy will look like in 10 years. At the current rate of technological change, we may very well be living the world of the Jetsons by then. But it’s probably safe to assume that people still will be spending large sums of money to dress like their favorite athlete, and Nike will likely still have a large chunk of that market.
Charles Lewis Sizemore, CFA is the principal of Sizemore Capital Management, a registered investment adviser based in Dallas, Texas. As of this writing, he was long AAPL.