1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 72
NIKE, Inc. (NYSE:NKE) designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. It is one of the most prominent fitness stocks to invest in. The company has been making efforts to clear excess inventory. During the first fiscal quarter, the firm saw its inventory soar 44% to $9.7 billion as it took holiday supplies early and bounced back from some of the pandemic-related supply chain issues of the last two years.
On September 30, Jefferies analyst Randal Konik maintained a Buy rating on NIKE, Inc. (NYSE:NKE) stock and lowered the price target to $115 from $130, noting that supply chain, foreign exchange, and promotional-related headwinds weighed on fiscal Q1 performance.
At the end of the second quarter of 2022, 72 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in NIKE, Inc. (NYSE:NKE), compared to 67 in the preceding quarter worth $3.98 billion.
In its Q2 2022 investor letter, Madison Funds Management, an asset management firm, highlighted a few stocks and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:
“NIKE, Inc. (NYSE:NKE) is the largest seller of athletic footwear and apparel in the world. Started from humble beginnings as Phil Knight’s “crazy idea” in a Stanford entrepreneurship class, Nike marked its 50th anniversary this year. By remaining true to its innovative culture, the brand is as strong as ever and continues to generate attractive growth, soon to surpass $50 billion in annual revenue. In addition to the continuous investments in brand innovation and marketing, over the last few years Nike has invested heavily to lay the foundation for multi-channel commerce. Today, Nike generates approximately 40% of its revenues through its online channel and branded storefronts. Empowered by CEO John Donahoe’s “Nike Consumer Direct Offense,” Nike’s ongoing investments are expected to further drive their overall revenue mix towards the direct-to-consumer channel which we estimate will result in substantial margin improvement over the next three to five years.
While Nike’s business in China, which accounts for approximately 20% of revenue, is experiencing challenges today, our due diligence suggests that consumer preference for the Nike brand outside the U.S. remains incredibly strong. Overall, we expect Nike’s broader ecosystem, often referred to as the Nike Marketplace, to continue to leverage the company’s innovation and premier brand to build direct consumer relationships which deepen Nike’s competitive moat and enhance its financial profile. Turbulence in the Chinese market and concerns over consumer spending in the US and Europe enabled us to initiate a position in Nike at an attractive discount to our appraisal of the company’s long-term value.”
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