1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 81
NIKE, Inc. (NYSE:NKE) is involved in the design, development, and marketing of athletic footwear, apparel, equipment, and accessories worldwide. They offer a wide range of products for men, women, and kids, including both athletic and casual footwear, as well as apparel and accessories. It is one of the best sporting goods stocks to buy. On June 29, NIKE, Inc. (NYSE:NKE) reported a Q4 GAAP EPS of $0.66, falling short of Wall Street estimates by $0.02. On a positive note, the revenue of $12.83 billion outperformed market consensus by $250 million. The company also made share repurchases worth $1.4 billion during the quarter.
According to Insider Monkey’s first quarter database, 81 hedge funds were long NIKE, Inc. (NYSE:NKE), compared to 71 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with a position worth $825 million.
Here is what Madison Funds specifically said about NIKE, Inc. (NYSE:NKE) in its Q2 2022 investor letter:
“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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