Here’s Why RiverPark Funds Added NIKE (NKE) to its Portfolio

RiverPark Funds, an investment management company, released its “RiverPark Large Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The second quarter was extremely difficult for the fund which returned -34%. Year to date, the fund returned -47%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

RiverPark Funds discussed stocks like NIKE, Inc. (NYSE:NKE) in the second quarter investor letter. Headquartered in Beaverton, Oregon, NIKE, Inc. (NYSE:NKE) is a sportswear company that engages in the design, development marketing and distribution of footwear, apparel, and other accessories. On September 20, 2022, NIKE, Inc. (NYSE:NKE) stock closed at $102.42 per share. One-month return of NIKE, Inc. (NYSE:NKE) was -8.07% and its shares lost 34.95% of their value over the last 52 weeks. NIKE, Inc. (NYSE:NKE) has a market capitalization of $160.652 billion.

Here is what RiverPark Funds specifically said about NIKE, Inc. (NYSE:NKE) in its Q2 2022 investor letter:

“NIKE, Inc. (NYSE:NKE), also a previous holding, is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $46 billion in revenue, $6 billion in 2021 annual free cash flow, and over $4 billion of excess cash. We expect the company to return to at least 10% annual revenue growth over the next few quarters, in line with management guidance. Moreover, we believe that NKE should continue its accelerating profit growth, as we expect margins to increase materially through rising average sales prices (from both increased pricing and a mix shift to more premium products), the company’s deep innovation pipeline, a secular shift from the company’s traditional wholesale channels to a more direct-to-consumer approach (now 35% of revenues up from 16% ten years ago), and a more streamlined supply chain. We believe that the continued global secular growth trend towards active wear will continue to aid Nike’s topline growth, while we expect the combined gross and operating margin improvements from its initiatives will drive long-term mid-teens or higher annual EPS growth for the foreseeable future. We took advantage of the selloff over the past few months to reinitiate a small position in NKE at a multi-year low in its valuation.”

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NIKE, Inc. (NYSE:NKE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held NIKE, Inc. (NYSE:NKE) at the end of the second quarter which was 67 in the previous quarter.

We discussed NIKE, Inc. (NYSE:NKE) in another article and shared the list of blue chip stocks to buy according to billionaire George Soros. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.