The combination of a solid growth rate and a relatively low price has inspired many investors to purchase Nike stock. The athletic footwear company has an internationally recognized brand and a pattern of strong performance. Nike can be a good stock to buy as a beginning investor or to add to an existing portfolio. You can buy Nike stock either directly from the company or through a brokerage firm.
EditEvaluating Nike’s Performance
- Read Nike’s annual report. Start with the letter to the shareholders, which summarizes the stock’s performance over the year. From this letter you get a narrative context that will help you understand the data in the rest of the report.
- You can access Nike’s annual report at http://investors.nike.com/investors/news-events-and-reports/?toggle=reports. There are also links to archived reports, if you want to go back a few years with your research.
- The annual report also includes some of the reports Nike is required to file with the Securities and Exchange Commission (SEC), which give you insight into the company’s assets and liabilities.
- Check SEC filings and other recent news. Beyond the annual report itself, you can also learn about Nike’s performance by reviewing the company’s SEC filings and recent press releases and minutes from stock holder meetings.
- Find all of Nike’s reports and other investor resources online by visiting http://investors.nike.com/investors/news-events-and-reports/default.aspx?toggle=topBanner.
- Watch Nike stock for a few months. Watching Nike stock for a few weeks or even months will give you a better idea of what to expect out of the stock. This will help you make a more informed decision about how much stock you want to buy.
- Check the stock ticker once every few days. You also may want to set up alerts or notifications and monitor the stock on your smart phone.
- Consider qualitative information about Nike. To get the fullest picture of any company, look at news articles about the product and the company’s executives. Find out the goals and reputation of Nike’s leading officers and how these are affecting the company’s bottom line.
- Since Nike sells athletic footwear and apparel, you might look at new lines that are being launched. New lines and patented innovations improve Nike’s competitiveness in the overall market.
- Compare Nike to other athletic footwear and apparel companies, such as Adidas and Reebok.
- An endorsement contract with a promising athlete could bode well for Nike’s future. On the other hand, if any of Nike’s existing contracts are injured or have been performing poorly, this could spell trouble.
- Craft your investment strategy. Once you’ve completed your research, it’s time to put the information together. Based on the company’s past performance and the goals and strategies of the management, you should be ready to reasonably predict the company’s future performance.
- Look at the current price of the stock to decide how many shares you want to buy, or how much overall money you want to invest.
- Generally, it’s not the best idea to put all your investment “eggs” in one basket. But if you’re a starting investor it’s also a good idea to start small. Nike can be a good beginner stock because it pays dividends.
EditBuying Through a Brokerage Firm
- Create your investment profile. Your investment style can help you narrow down the various brokerage firms to find the one that will work best for you. Build a profile based on how much money you want to invest, how often you plan to trade, and how much investor support you want from your broker.
- Online brokers typically are best if you plan to trade frequently and don’t need a lot of guidance and support. However, if you want a close, personal relationship with an individual broker, you’ll typically want to make fewer trades as your fees will be higher.
- Compare possible brokers. If all you want to do is buy some shares of stock in Nike and reinvest your dividends, you probably don’t need a full-service broker. Look for an online discount broker with low fees.
- The advantage of using a broker is that you don’t have to do much, if anything, in terms of managing your investments. Your broker will manage your investments for you, but this does come with costs.
- If you plan on expanding your portfolio over time, or buying more complex investments, you may want a full-service broker who will provide more hands-on attention. The more hands-on management and personal attention you get from your broker, the higher their fees will be.
- Decide how much you want to invest. Many online brokers don’t require a particular minimum initial investment. This means you can open your account with a relatively small amount of money and add to it over time.
- You’ll pay a fee for each stock purchase, so it may be better for you to save the money you would spend buying Nike stock in a savings account for a few months or a year, and then make a single purchase.
- Pick the right order type. There are many types of orders to buy stock, but you don’t necessarily have to be familiar with all the order types to buy Nike stock. The easiest thing to do is place a limit order for the amount you want.
- A limit order is a request to buy shares at the price you’ve named or better. Look at the current price of Nike and calculate the number of shares you could buy at that price for the total amount you plan to invest.
- For example, if Nike is currently trading at $50 a share, and you plan to invest $2,000 in Nike stock, you could place a limit order for 40 shares of stock at $50 a share.
- You might also consider placing a market order, which means you want to buy stock as soon as possible at the best available price. You would let your broker know the maximum amount of money you want to spend.
- Submit your order to your broker. If you are using an online broker, you typically can execute the order yourself and just wait for the order to be filled. If you have a full-service brokerage firm, call or email your broker and give them the details of your order.
- At this point you’re a Nike investor. Continue to monitor the stock’s performance so you can see how your investment is doing. Keep in mind stocks go up and down from day to day, so don’t panic and sell in response to a short-term loss.
EditBuying Through Direct Investment
- Check fees and buying requirements. Nike has a direct stock purchase plan (DSPP) through which you can buy stock directly from the company. Nike’s DSPP has initial set-up fees of at least $10, and requires an initial investment of $500.
- You may also have the option of setting up an ongoing automatic investment of at least $50 a month. After you reach the $500 threshold (10 transactions), you can lower your automatic investment amount if you want.
- Decide how much to invest initially. The maximum amount you can invest in Nike per year in a DSPP is $250,000. If you want to spend more than that, you must go through a brokerage. You also must meet the minimum investment requirements.
- If you want to set up ongoing automatic investments, you can set them up for any amount you want provided you make the initial $500 investment. You can set up 10 investments of $50 to meet that threshold, or set up automatic investments for more than that.
- Complete your enrollment form. You must complete a form with personal information for yourself and anyone else who will be jointly holding the stock with you. You also must decide whether to reinvest your dividends.
- Nike stock pays out regular dividends. You may choose cash payment, reinvestment, or partial reinvestment. If you don’t check a box on your enrollment form, you will automatically be enrolled in full dividend reinvestment.
- Provide bank account information so your investment funds can be withdrawn from your bank account.
- Enroll in Nike’s dividend reinvestment plan (DRIP). If you didn’t automatically enroll in Nike’s DRIP when you purchased your stock, you can change your preferences later. Reach out to Nike’s investor relations or talk to your broker for more information on how to enroll.