Why This Investor Says Selling Nike Stock Is ‘Absurd’
bears control Nike Inc. NKE shares after the company reported earnings. An investor was puzzled after considering the report’s good news as positive and the bad news as better than expected.
What there is to know: Hightower Councilors Stephanie Link bought Nike shares ahead of the company’s report, calling it “the definition of quality on sale.” She increased her position on Tuesday after the stock fell below where she had bought it last week.
“At the time I bought it, a small position, it was already down 36% (YTD) so I thought a lot of bad news was in the stock,” Link said Tuesday on the “Fast Money Halftime Report. from CNBC.
The bears are hanging on to lower numbers in China, but Link pointed out that the company’s results in China were strong compared to its peers.
“China was down 19%. Well, I actually thought China was going to be down 30% to 35% because Adidas fell 35% in China, as did V.F. Corp. in their final quarters,” Link said.
She acknowledged that the stock could trade sideways for a while, but she increased her position as she doesn’t see it falling much.
“The bears are winning today, which I find absurd because the stock is already down so much,” she said.
Link highlighted the company’s strong revenue and bottom line results, strong guidance and new $18 billion buyout.
Related Link: Nike‘s Fourth Quarter ‘Not As Bad As Feared’: Why 3 Analysts Lower Price Targets
“I think they’ll weather the storm pretty well, and I think the stock is down, it’s down, and I like the risk/reward here,” Link said.
NKE Price Action: Nike has a 52-week high of $179.10 and a 52-week low of $103.46.
The stock was down 6.32% at $103.51 at press time, according to data from Benzinga Pro.
Photo: grailify from Pixabay.