Heisenberg
Stock Chartist, Long/Short Ideas
Nike at a 12.5-year low is a falling knife worth nibbling at because the brand should eventually turn around. Former Apple CEO Tim Cook, on Nike's board since 2005, bought over $4M of shares in the past nine months at about $54.50, so buying near $36.30 is a 34% discount to his basis. An activist stepping in could add about 10%. x.com x.com x.comÂ
Nike deserves room for a rebound now, though it was never a recommendation. Tim Cook buying more than $1 million of the stock for himself says something. x.comÂ
Nike's dividend yield, now high versus its ten-year history, is the new question for investors and makes the stock very interesting at these levels. The numbers have not bottomed, guidance was atrocious and parts of the business are getting worse, offset somewhat by better US wholesale. The guidance implies Nike will use some cash to fund the dividend, but it has plenty. The stock remains too expensive on earnings and too cheap on dividend yield. x.com x.com x.com x.com x.comÂ
Nike keeps getting its lunch eaten by competitors, with no clear way to turn the ship around. It now expects fiscal 2027 revenue to decline by high single digits, per @negligible_cap. Caitlin Clark isn't the savior, and the stock isn't worth touching. x.com x.comÂ
Nike's brand concerns look priced in; stabilization, not sudden revenue acceleration, is what the speculative long needs. A few good campaigns and a return to large stores could help, though China consumers will be a drag. Short-term EPS is a poor indicator, and customers may return after trying other brands. x.com x.comÂ
Nike is the best stock to buy when others are fearful. x.comÂ
Nike's 29x P/E even after a steep share-price decline leaves it expensive enough to short. x.comÂ
Nike's push to reposition as a premium sports brand looks like the right route to recovery, including in Greater China. New CFO Dave Denton was clearer, and Alex Arnault's board seat, Jordan's return to scarcity, elite athlete deals and less discounting support it. EPS was fairly strong and margins are improving; guidance looks set deliberately low to beat, since management says the decline largely stems from its own choices. The dividend is safe; a full turnaround may take 3-5 years. x.com … Show more
Nike's valuation pays investors to wait for a turnaround that will take longer than expected. It trades at just 16x earnings, near its lowest valuation ever, with a roughly 5% dividend yield, and would need a 127% rally to regain its 200-week moving average. Revenue is projected to fall another 4% in FY2027, but the business will grow again; the market prices it as if it were disappearing. Unlike Novo Nordisk, Nike faces no patent cliff. x.com x.comÂ
Nike combines more than 10 years of flat or declining share price with declining fundamentals, which rules it out as a long-term winner in a temporary slump. Microsoft's long sideways stretch was different because its fundamentals kept working. Nike could still become a major winner, but it suits concentrated investors willing to watch every development and exit quickly. Its upcoming dividend aristocrat status shouldn't be banked on; VF Corp cut just shy of 50 years of increases. x.comÂ
Nike could re-rate aggressively if it finds a way to re-accelerate growth, which makes it start to look attractive here. China is still a problem, and the dividend yield is now 4.3%. x.comÂ
