We recently published a list of Jim Cramer’s Top 11 Trump Trades: Winners and Losers. Since Nike Inc (NYSE:NKE) ranks 6th on the list, it deserves a deeper look.
Jim Cramer in a latest program talked about the consequences of the failed assassination attempt on Donald Trump and mentioned a few stocks that could benefit if the former President comes to power again.
“You are sticking your head in the sand if you think nothing has changed after the failed assassination attempt on the now-official Republican nominee for President.”
Cramer said that the “frightening moments” of the assassination attempt have indeed “cut in the favor” of Trump’s win and he was “already leading in the polls.”
Cramer recalled the days when he was the anchor of Kudlow & Cramer show and Biden was a senator from Delaware. Cramer said Biden once told him that he was the “poorest senator out of one hundred because he owned no stocks.”
“He was actually bragging about it,” Cramer said.
Cramer said that Joe Biden is not the “champion” of stocks and he’s “on board with labor.”
Jim Cramer’s Thoughts on Donald Trump
Here’s what Cramer said about Trump:
“In the many years I’ve known Trump and I have known him fairly well, he’s been wildely pro stock market, always watching it like a hawk. He loves bantering about the stock market.”
Cramer said that even though Trump was in “real estate, he enjoyed stocks.”
Jim Cramer added that Trump always thought there was too much regulation and was also “wildly” pro-oil and gas. The CNBC host said since Trump cannot see the stock market going down and sees the market gains as a positive factor even for his presidency, his arrival in the White House could boost stock portfolios.
“Hate him or like him, he’s good for your portfolio.”
For this article watched the latest programs of Cramer where he mentioned stocks that could benefit from a Trump presidency. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Rose Carson / Shutterstock.com
Nike Inc (NYSE:NKE)
Number of Hedge Fund Investors: 71
Jim Cramer thinks that if Donald Trump comes to power, Nike could “remain a loser” because it’s exposed to China.
Nike Inc (NYSE:NKE) has indeed been a loser this year, down about 31% so far. Nike is getting battered in China amid declining sales as consumers cut back on spending due to rising inflation. Nike Inc (NYSE:NKE) also cut its fiscal first-quarter guidance as sales are likely to decline in their upcoming Q1.
However, Nike Inc (NYSE:NKE) bulls believe the company will be able to come out of this crisis following rate cuts and easing of global economic situation. Nike remains a giant, with about $11 billion in cash, sufficient to cover its $8.9 billion long-term debt. Nike Inc (NYSE:NKE) is also the leader in the footwear market which is expected to grow at a CAGR of 6.86% from $173.89 billion in 2024 to $242.33 billion by 2029. Nike Inc (NYSE:NKE) sales in the market are about 100% higher than Adidas, the second-biggest player in the market.
Another strong reason to own Nike Inc (NYSE:NKE) shares is its dividend, which has grown for two decades now without a break.
Nike Inc (NYSE:NKE) has a forward P/E ratio of about 23, about 35% lower than its five-year average. This makes the stock undervalued for long-term investors with a large risk appetite.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
Overall, Nike Inc (NYSE:NKE) ranks 6th on Insider Monkey’s list titled Jim Cramer’s Top 11 Trump Trades: Winners and Losers. While we acknowledge the potential of Nike Inc (NYSE:NKE), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.