Since this is the final Friday of 2008, I decided to take it back to the basics…of stock valuation!
In late October I began hosting Fundamental Fridays to see if trading on the fundamentals could yield profits. So far I have used ratios like price-to-earnings (P/E), return on equity (ROE), and return on assets (ROA) to examine the valuation of four companies: Dell, Alcoa, Amazon.com and Nike.
Here are the results:

10/31: Dell (Ticker: DELL) - Recommendation: BUY, 12/24 Price: $10.65. At the time of this recommendation, shares of Dell were trading at $12.20…strike one!
11/14: Alcoa (Ticker: AA) - Recommendation: BUY, 12/24 Price: $9.39. Alcoa’s shares were trading at $11.20 …read more

In the fourth installment of Fundamental Fridays, TST will examine Nike, Inc.
Nike, Inc. (Ticker: NKE) is an athletic apparel company.  Nike was founded in 1964 and is based in Beaverton, Oregon. In the past 52 weeks, shares of Nike have traded as low as $42.68 and as high as $70.60.  Shares closed yesterday at $52.69.  Let’s check out the fundamentals.

Valuation measures – Data from Reuters and ADVFN Financials
Price-earnings - Compares the current market value per share to the earnings per share.  P/E ratio for NKE: 13.62, P/E industry average: 12.16,  P/E sector average: 7.09. Signal: OVERVALUED
Price-sales – Compares the current market value per share to the revenue per share.  P/S ratio for NKE: 1.24 , P/S …read more