The Panic-Proof Portfolio (Stockchase Research)Nike IncNKETOP PICKMar 12, 2024

He tried to bottom-fish this 10 points ago and has lost money. Painful. It hit a 52-week low today.

The leisurewear space is highly competitive. Nike has been lost from a management standpoint and there's little confidence in the new CEO. He prefers Dick's Sporting Goods, which has tremendous buying power and they offer the consumer a buying experience.

You can have a well-run company and a good product, but fashion preferences change. If another company beats you at your game, you're in trouble. Adidas is very popular right now. A lot would have to change for him to consider investing.

It's a tough one. Have little cash flow per share. Valuation is not low. Sales are weak. The excitement is gone. In a competitive space. The balance sheet is okay, not amazing.

They're trying hard to turn around, but there's lots of competition. It's just okay. He sold it.

He sold this already. Doesn't see an earnings bump ahead. They didn't raise guidance. Was up 4.9% today, but doesn't believe in it. He lost a lot of money on this. Nike has too much competition.

Faces competition and consumers no longer paying jacked-up prices. In their last quarter, revenues were -3%, digital sales -9%, and Converse -35%. Shares are -33% this year. Leisurewear as a whole is weak. Fashion always changes. Nike could turn things around, though.

Still an expensive multiple. He doesn't like to buy fashion or clothing companies. Tastes change way too quickly. He doesn't understand the clothing industry. He doesn't even like to go shopping :)

So many good choices for stocks out there, you don't want to take the risk of this turnaround. Hasn't yet demonstrated it can turn the ship. Execution, marketing, and geographic problems.

Several levels of trouble. He added recently ~$45. Not looking for homeruns. Potential for it to get back up to mid-upper $50s is realistic. Still very expensive at 30x forward PE. Unless they can figure out the China headwinds, it will struggle. Every time it rallies, it's likely to a lower high. Selloffs will be to lower lows.

Growth story for decades, but now a mature clothing company. A trade, not an investment.

He made a mistake. He expected a turnaround, which is not happening fast enough. Shares could keep falling.

It has been a very challenged name for a long time and is well below its 200 day moving day average which is moving lower. Has 0% or negative growth. Consumer discretionary spending names in general are going through difficulty.

Don't confuse iconic brand-name recognition with business of Nike itself. Turnaround story. Won't trade at the premium it used to. Athletic world is a lot more fragmented. Not a structural long-term hold. Might be a tactical buying opportunity.

Tariffs took a bite out of its allure and exposed concentration risk. Upstarts are doing a good job taking market share from incumbents. Probably won't be hurt by holding.