Is it Wise to Own Nike (NKE) Shares?

ClearBridge Investments, an investment management firm, published its “All Cap Growth Strategy” fourth quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge All Cap Growth Strategy underperformed its Russell 3000 Growth Index benchmark in the fourth quarter. On an absolute basis, the Strategy generated gains across seven of the eight sectors in which it was invested (out of 11 sectors total). The primary contributors to performance were the IT and health care sectors while the sole detractor was the communication services sector Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

ClearBridge All Cap Growth Strategy, in its Q4 2021 investor letter, mentioned NIKE, Inc. (NYSE:NKE) and discussed its stance on the firm. Founded in 1962, NIKE, Inc. (NYSE:NKE) is a Beaverton, Oregon-based footwear manufacturing company with a $212.4 billion market capitalization, and is currently spearheaded by its CEO, John Donahoe. NIKE, Inc. (NYSE:NKE) delivered a -19.40% return since the beginning of the year, while its 12-month returns are down by -2.06%. The stock closed at $134.34 per share on April 04, 2022.

Here is what ClearBridge All Cap Growth Strategy has to say about NIKE, Inc. (NYSE:NKE) in its Q4 2021 investor letter:

Nike 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 is also still underindexed to the women’s category, which we see as a significant ongoing catalyst.

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Our calculations show that NIKE, Inc. (NYSE:NKE) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. NIKE, Inc. (NYSE:NKE) was in 68 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 70 funds in the previous quarter. NIKE, Inc. (NYSE:NKE) delivered a -19.26% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on NIKE, Inc. (NYSE:NKE) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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