We recently published a list of Jim Cramer Discusses These 10 Stocks & Wonders If Trump Will Try Firing The Fed Chairman. In this article, we are going to take a look at where NIKE, Inc. (NYSE:NKE) stands against other stocks that Jim Cramer discussed.
In a recent appearance on CNBC’s Squawk on the Street, Jim Cramer commented on investor worries about lower economic growth and rising inflation. The phenomenon is called stagflation, and Cramer believes that the fears are unwarranted. According to him:
“Well look, when you go over how many times you mention inflation. When you go over how many time you mentioned economic weakness, you could easily craft a story which just says this is the worst possible economy. I come back and say look, we have created a level of negativity in this country that is extraordinary. I don’t think anyone’s really hiding that.”
Another key player in the economy and the stock market has been the Federal Reserve. Interest rates are still high after a record hiking cycle in 2022. For Cramer though, one concern is that President Trump might take aim at Fed Chairman Jerome Powell as the central bank is not lowering rates despite the President’s insistence:
[When asked what he would like the Federal Reserve to do] “Look, uh, there is a. . .theme here. You fired two Democrats. In the FTC. No one knows what to do. If he can fire two, if he can fire two from the FTC, he can fire Powell. Now doesn’t matter whether it’s legal or not. I thought Peggy Newton had a great piece today, talking about President Jackson. Now we’re really going back, even before McKinley, which is somehow the North Star for this administration. And I think people are just worried that Powell will be fired cause he’s not cutting rates. And I think that all of that we just heard is irrelevant. What matters that as long as there’s a belief that despite Fed chief Powell saying twice that he’s not going anywhere, as long as there is a belief that President Trump may actually have this . . where he can fire anyone, no one’s safe. And I think again, that’s what at stake. I mean if you want to know what’s at stake with the Federal Reserve in terms of what they’re saying, sure you could say they’ve got some stagflation. I think the most important thing Steve said was, in the end that he thinks that’s 11% of the economy, it’s important, I’m just getting 12 to 15. But I think that Powell’s in play. And he shouldn’t be. But what is it, the Justice Department, some people say on the left, is owned by the President. So I mean, how many divisions does the Supreme Court have.”
In fact, Cramer believes that Trump’s potential actions against Powell might also be priced into the markets. He added:
“I’m not saying that he will do this. I am saying that since the FTC. . .look if he took it off the table you would see the futures positive right now. I just think that nothing we’re hearing from the Fed is at all unusual. No one’s saying that listen once tariffs go on, then it’s going to be permanent inflation. By the way, there is some growth to the economy. I understand that the new theory is no growth. I understand that the new theory is fear. I want to take the other side of fear. I want to take value. Now I know that I came back from a conference that involved about 20% of the S&P. Which is Jensen Huang’s. . . conference. And everything was positive.”
Amidst a sea of negativity that hasn’t translated well for markets, Cramer also stressed the need to be positive. Mentioning stock futures, he commented:
“But you know I wanna accentuate the positive because it actually is the empirical quality of being right. But right now, if you look at the futures, do you always have to say you know, those. . .future are right. The Dow should be down 386 on implied open. Or should we say, is that wrong? Which makes you more money? Is that wrong? And I’m willing to say it might be wrong.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on March 21st.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders In Q4 2024: 73
NIKE, Inc. (NYSE:NKE) is an athletic apparel company. Cramer has discussed the firm several times this year. Most of his remarks have focused on the firm’s former CEO and his disastrous decisions that led NIKE, Inc. (NYSE:NKE)’s stock to bleed 29.6% in market cap in 2024. The shares dropped by 9.8% in March after the firm’s latest financials saw CFO Matthew Friend warn that fiscal Q4 sales could drop in the mid-teens percentages which was higher than analyst estimates of 12.2%. Cramer discussed NIKE, Inc. (NYSE:NKE) in great detail after the earnings:
“Yes, Sarah, you know that Nike had a, it was tough to listen to because of the inventories.”
“Look, let’s just cut to the chase. What really killed us? . . .is when you hear a company just basically saying look, macroeconomic is bad, I wanna read the words. . .’we expect revenues,’ this was devastating, this is from Matthew Friend, and you know straight shooter right,. . .’we expect Q4 revenues to be down in the mid-teens range,’ why?, okay ‘unfavorable shipment time in North America,’ ‘two points of negative impact from foreign exchange,’ and of course, ‘400 to 500 basis points down creating restructuring charges for gross margins,’ look you’re not gonna want to own that stock if you hear that. But do you want to sell it Sarah at 65? That’s the question.”
“And if we just want to focus, listen, Sarah, if we only want to focus on how Nike Jordan’s are doing, then we are doing a disservice to people. We know that they’ve got that wrong locker, we know that Donahue almost wrecked this company. Which is really a kind of a land speed record. . . I don’t know I would put Donahue in the fastest ever to crash a car. But I liked very much what I hear from Darden. I mean why didn’t Darden get mentioned? Why isn’t Olive Garden mentioned in the equation? I mean that’s the consumer. But you know what again, we can focus on the negative. I can have more fun doing the negative than anyone because I read four conference calls that were negative. I read ten that were positive.”
“But Sarah, let’s talk about a stock that is bad. . . Nike is the paradigm of what is wrong. But, it’s a great franchise so you have to say at 65, is that company worth something? You know the negatives last night were heavy, no real positives. But is that stock deserving of say fifty dollars, fifty five dollars? Is that where you should trade.”
“Well, the uncertain consumer seems to be certain when they’re buying on ON, a little more certain when they’re buying Hoka. I think the uncertain consumer turns certain when they’re buying New Balance. I think that as you know, the Adidas consumer doesn’t seem all that uncertain. I don’t want to hear uncertain. If you’re going to talk about win, you should talk about loss. The company had a huge series of losses. Look I know Corporate America likes to say you know what, don’t worry, let’s forget about the past. Corporate America. . .never wants to be able to say we were gutted by a previous CEO. Because that’s just not the way it’s done. I’m gonna do it. I cannot believe, how that man, the previous CEO, gutted anything that was new, relied on the old, it failed. Decided to sabotage people like Mary Dillon, at Footlocker. Now they have to take back all the inventory. They have no place to put it other than the Nike factory stores. Look there’s a lot of damage. And I think what happened is, there was much more damage than people realized, Sarah. And the other guys didn’t have damage. The other guys didn’t sit still. And I think the company should start acknowledging that not only do they have to win, but the other guys have to lose. And you have to beat them. And I think that while they talk a good competitive game and they talk about the Ohio State football program. . .what they didn’t talk about is how to beat the other guy. Yes, they’re gonna return to sport. . .but that means you’re going to have to design, and you can’t start designing overnight!”
Overall, NKE ranks 1st on our list of stocks that Jim Cramer discussed. While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.