China’s Real Estate Market Crash Can Affect These 5 American Stocks

In this article, we discuss the 5 American stocks that can be affected by China’s real estate market crash. If you want to read about some more American stocks that can be affected by China’s real estate market crash, go directly to China’s Real Estate Market Crash Can Affect These 10 American Stocks.

5. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 67 

NIKE, Inc. (NYSE:NKE) makes and sells athletic products. The revenues of the company took a major hit in the past few months as a backlash against Western brands in China and shortages of merchandise in the marketplace resulted in macro challenges. The drop illustrated what a crash in the Chinese economy would mean for Nike, which has strong exposure to the Chinese market both in terms of sales and manufacturing. Peers like Adidas and Puma also have exposure to China, but not at the level of Nike. 

On July 25, Piper Sandler analyst Abbie Zvejnieks assumed coverage of NIKE, Inc. (NYSE:NKE) stock with a Neutral rating and a price target of $115, noting that the gross margins of the firm have structurally improved. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in NIKE, Inc. (NYSE:NKE), with 6.7 million shares worth more than $905 million.  

In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:

“NIKE, Inc. (NYSE:NKE) is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. NIKE, Inc. (NYSE:NKE) is also still under-indexed to the women’s category, which we see as a significant ongoing catalyst.”