AFM373 Lecture Notes - Lecture 2: Sneakers, Sensitivity Analysis, Dividend Discount Model

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM373
• Professor: Alan Douglas

Document Summary

We are looking from the perspective of kimi ford (portfolio manager at northpoint. She is considering buying shares in nike, but nike"s share price has declined significantly from beginning of year. Her fund has an emphasis on value investing. Her fund was doing well when the stock market was declining over past 18 months: 2000: return of 20. 7% when s&p fell 10. 1, 2001: 6. 4% when sp fell -7. 3% Nike has held a meeting on goals they want to achieve to revitalize the company because their market share dropping from 48% to 42%. They"re revenues stayed at 9billion and net income dropped from 800million to 580million. Nike"s plans to boost revenue: develop more athletic shoe products that are mid-priced, push apparel line, control expenses better, lt revenue growth targets of 8% to 10% and earnings-growth targets above 15% Others are excited for the growth opportunities in apparel and international businesses.