Adidas as a company certainly has their fair share of competition from companies such as Nike and Puma, but they continue to strive in the face of adversity as they produce new and innovative products. Kanye West has his latest shoe line out with Adidas that is sweeping the globe as many search for these shoes. Not only that, they are in many professional sport arenas and a brand name in soccer, which is the worlds most popular sport. Being able to market is key to stand apart from everyone competing for the same market share.
Being invested in the retail sector certainly opens you up to the risks, but being apart of such a well known brand will allow you to sustain in the slightly slower markets due to brand loyalty. Companies in this position thrive off brand loyalty and will continue to convert people to this level as that can help solidify sales for the future. Deeper thinking indicates that they could purchase these products for their children, bringing up the next generation of Adidas shoppers.
How important is Alliance Data's Liquidity
Alliance Data
financial leverage refers to using borrowed capital as a funding source to finance Alliance Data Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Alliance Data financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Alliance Data's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Alliance Data's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Alliance Data's total debt and its cash.
Is Alliance Data valued wisely by the market?
Along with economic risk, there are a few risks to keep in mind before jumping into the retail space. First, if you have seen the news then you would have known retails are closing and combining as the usual market place is shifting to the online platform. Of course you still have to try shoes and clothing on, but these types of companies needs to shift their presence online. Secondly, product quality will dictate how success is maintained, because people will not purchase sub par products. It doesn’t take much for a person to switch brands and become a new loyal customer of the competition.
First, take a look at your own portfolio and see if this is something you can add. Only you can determine if this is a good fit so be sure to look at the fundamentals and technical data of a chart and formulate a well rounded opinion. If you ever get stuck in your research, reach out to an investing professional as they can help direct you in the right direction to help benefit your returns.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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