Surprise, Surprise!

Goddess of Sport. Shares of sporting goods giant Nike (NYSE: NKE) surged 10 percent to $89.90 on June 28, the stock’s greatest one-day gain since October 2008.

Nike’s stock went airborne after the firm reported fourth-quarter profits rose 14 percent to $594 million, or $1.24 per share, beating analyst’s estimates.

Almost all Nike brands made gains in 2011, with Nike Running posting the highest sales growth at 30 percent. Nike’s four affiliate brands—Cole Haan, Converse, Hurly and Umbro—brought in $2.1 billion in revenue, 13 percent more than in the previous year. 

Sales in China totaled $2.1 billion and the company expects this figure to double by 2015.

The company raised its fiscal 2015 revenue outlook to $28 to $30 billion, from $27 billion. Nike maintained its target of high single-digit revenue growth and mid-teens earnings-per-share growth through 2015. 

The firm intends to increase its dividend payout by 25 to 35 percent each calendar year in the period. The firm said it will expand its Nike-owned store presence worldwide to 850 locations by 2015, from 690 today.

The company has already raised prices for its fall and holiday lines. Nike is in talks with English premier League team Manchester United regarding a merchandising deal worth $644 million.

The firm also resigned controversial NFL quarterback Michael Vick, four years after Vick was convicted of dog fighting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Who’s Buying What

Loan Star. Payday lender EZCORP’s (NSDQ: EZPW) shares surged 7.1 percent on June 27, 2011, after the company’s stock was upgraded to “buy” from “neutral” by Henry J. Coffey Jr., an analyst for Sterne Agee. Coffey boosted his earnings per share forecast for EZCORP to $3.00 from $2.75, noting that EZCORP’s success in domestic and foreign markets should result in earnings-per-share growth of 18 to 20 percent for several years.

The payday lending industry has come under greater scrutiny in recent years and lawmakers in Washington have passed regulations that cap payday loan amounts. State lawmakers have also sought to require greater transparency among payday lenders. Despite these headwinds, EZCORP has posted strong sales growth.

The company’s second-quarter US sales rose 22.6 percent year over year to $125.7 million, prompting management to raise its fiscal 2011 earnings guidance to $2.55 from $2.40. EZCORP shares have gained 32.1 percent this year as of July 1.

In May, EZCORP purchased 15 Mister Money and seven Jumping Jack Cash pawn stores. The acquisition will allow EZCORP to expand operations in Iowa, Wisconsin and Utah and establish a presence in Illinois. This recent acquisition will build upon the 670 pawn and short-term consumer loan stores EZCORP operates in the US, Canada and Mexico.

In April EZCORP acquired the Canadian operations of Cash Converter, an Australian payday lender. EZCORP also plans to release a branded prepaid debit card.

The Checkup!

Hard Lesson. In the April 2010 issue, Doug Asiello, portfolio manager for AIM Mid Cap Core Equity (GTAGX) highlighted several stocks that would perform well amid muted economic growth. Here’s an update on how his picks have fared since then.

Shares of Apollo Group (NSDQ: APOL), the nation’s largest for-profit college chain, jumped 6.7 percent to $46.60 on July 1 after the firm’s fiscal third-quarter profits rose 18 percent year over year to $212.4 million, beating the Street’s forecast.

Since Asiello highlighted the company, Apollo’s stock has slide steadily amid reports of falling enrollment and claims of dubious financial practices. Enrollment continues to decline at Apollo’s flagship University of Phoenix. But the company said that it is making more money on a per-student basis. 

The company’s net profit dropped 7.5 percent to $553 million in its 2010 fiscal year ended Aug. 31, although revenue rose 25 percent to $4.9 billion. The Arizona-based company forecast revenue of $4.65 to $4.75 billion for fiscal 2011.

Apollo’s stock has declined 20.5 percent since April 2010.

In the first quarter of 2011, investment management firm Legg Mason (NYSE: LM) sold its stake in Kodak (NYSE: EK) for a $551 million loss. Legg Mason began purchasing Kodak stock a decade ago, when the shares traded at about $100. At the time of sale, Kodak shares had plummeted to $3.89.

In its 2011 fiscal year ended March 31, Legg Mason’s operating revenue rose 5.6 percent to $2.7 billion. In May 2010, Legg Mason announced a $1 billion stock buyback program. The company will repurchase an additional $400 million worth of shares in fiscal 2012.  The company also plans to reduce its operating costs by $130 to $150 million in 2012. Legg Mason’s stock has gained 12.5 percent since April 2010.