NIKE, Inc. (NYSE:NKE) is one of the stocks Jim Cramer shared his takes on. Cramer discussed the insider buying in the stock, as he remarked:
“Then there are the hope-spring-eternal buyers. I see a bunch of these stories, and I’m involved in some of them for the Charitable Trust, stocks like Nike, like Starbucks, which have seen their share price just obliterated by the poor performance of previous CEOs. I see green shoots in both these companies. And their strength, I’ve got to tell you, their strength this year so far reflects a real rebound. The three insider buyers of Nike, the CEO, a board member who was the former CEO of Intel, and, of course, Tim Cook, CEO of Apple, all signal that the business is indeed turning. Remember, insiders might sell for a lot of reasons, but they only buy because they think a stock’s headed higher longer term. They can’t flip.”
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NIKE, Inc. (NYSE:NKE) is an athletic and casual footwear, apparel, equipment, and accessories company that sells its products under brands, including Nike, Jordan, and Converse. SGA U.S. Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its third quarter 2025 investor letter:
“NIKE, Inc. (NYSE:NKE) is an iconic sportswear brand that has built its business around promoting a healthier lifestyle, offering products that combine performance, utility, and durability, all driven by technology and innovation. Nike’s gear has become a staple not only for athletes but also for casual wearers, propelled by innovation and strong execution in marketing and supply chain management. The company’s pricing power is anchored in its brand strength and technology, supported by a robust supply chain and distribution network. Competitors have lower margins, so any price war would impact them more than Nike. Repeatable revenues are driven by the nature of sportswear, which wears out over time and leads to repeat purchases, with 65% of sales coming from shoes, a category known for customer loyalty and stickiness. Nike’s revenue in developed markets is growing at mid-single-digit rates, while the rest of the world is growing even faster, fueled by increasing sports participation globally, rising sports spend per capita, greater e-commerce sales, and deeper penetration into emerging markets.
We had originally purchased Nike in U.S. Large Cap Growth portfolios in 2015 and held the position for nearly six years. Late in 2021, we liquidated the position due to a heightened valuation and short-term concerns around manufacturing and supply chain issues, as well as a volatile operating environment in China. Nike is currently embarking upon a change in strategic direction following a CEO transition to Elliott Hill, who is now roughly a year into his tenure. The company has rehired significant product/innovation talent, begun to reengage with previously abandoned wholesale distribution accounts, and is in the midst of managing down its classic franchises (to be essentially complete within the next six months) and opening up room in the marketplace for a strong flow of new innovative products in the coming quarters. We believe the business has bottomed out, with improvements expected each quarter going forward. Nike’s most recent financial results showed some early positive indications on product innovation and an improving order book. We see a pathway for the company to expand its operating margins by approximately 500bps over the next three years to be closer to historical levels, driven by a return to organic revenue growth and operating leverage, which will support strong double-digit earnings growth for the next several years. We have great confidence in Nike’s new leadership and expect they will succeed in the revitalization of an iconic business, delivering a sharp rebound in earnings growth in 2026 and 2027 following this reset in 2025. …” (Click here to read the full text)
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Disclosure: None. This article is originally published at Insider Monkey.
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