The 5 Stocks That Account for 78.95% of Varenne Capital’s 13F Portfolio

3. NIKE, Inc. (NYSE:NKE)

Value of Varenne Capital Partners‘ 13F Position: $41.5 million

Number of Hedge Fund Shareholders: 67

Varenne cut its NIKE, Inc. (NYSE:NKE) stake by 44% during Q2, just a quarter after first amassing it, slashing its exposure to the stock to 11.5% from 19.8% in the process. The position nonetheless remained the fund’s third-largest. There’s been net selling of NIKE among hedge funds during four of the past five quarters, with ownership of the stock slipping by 20% during that time.

NIKE, Inc. (NYSE:NKE) shares took a hit following the company’s fiscal Q4 results, as inventory surged by 23%, a clear indicator that even the most popular apparel brand in the world isn’t immune to the effects of falling discretionary spending. Nike indicated that it may need to adopt stronger promotional efforts in the coming quarters to clear out that inventory, which will put pressure on the company’s bottom line.

The ClearBridge All Cap Growth Strategy sees a number of potential future catalysts for NIKE, Inc. (NYSE:NKE)’s shares, discussing the company 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.