We recently compiled a list of the 7 Best Stocks for Beginners with Little Money According to Analysts. In this article, we are going to take a look at where NIKE, Inc. (NYSE:NKE) stands against the other beginner stocks.

On one hand, some investors view the status quo as a bear market, and on the other, some analysts hold a bullish view. While caution is necessary, blue chip stocks with historically solid results have an edge in the risk department.

The Status Quo Calls for Safer Investing

Geopolitical tensions on the one hand and economic turmoil on the other, have created a concerning situation for investors. On September 3, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared in an interview on CNBC to share his outlook of the market. Lee is particularly concerned about the job market, the surprise inflation has in store for the economy, and weak growth projections.

Lee emphasized that investors must remain cautious for the next eight weeks or so, especially with elections and rate cuts, he predicts that the general public is bound to be nervous and confused. While his timeline may not be exact, he expects economic conditions and political turmoil to settle within the suggested time frame.

He further added that it is safer to be cautious than to make hasty decisions at the moment. He also stated that the oil industry is particularly weak due to geopolitical tensions despite a massive rise in production. Lee added that increasing production levels does not indicate a booming global economy, because, previously, production increased only because prices were rising which led to more drilling and activity in the sector.

Lee recommended that investors will be able to buy long, and therefore it is best to remain cautious. He further added that we already had 7% corrections twice this year, and there is a possibility of another 7% to 10% correction in the market. He did agree that the market is currently testing investors’ patience and he predicts something close to a 5% pullback.

How Must Investors Navigate Moving Forward?

On September 6, Liz Ann Sonders, Charles Schwab’s chief investment strategist, appeared in an interview on CNBC to discuss how investors should navigate the market right now. Sonders held a particularly bullish view of the market. She further added that while there has been significant weakness and churn on the surface, it is concealed by cap-weighted index returns.

Sonders suggested that the market level declines were most likely a set-up for the broadening out we have witnessed. She shared her point of view on the market, which is rather bullish, and emphasized that stocks in the consumer discretionary, technology, and communication services sectors are doing particularly well. Sonders, however, did point out that the market may see an exhaustion in the mega-cap tech trade.

She then suggests that investors must let go of the perception that to succeed they must invest in mega-cap tech stocks. She states that there are a myriad of opportunities outside of the mega-cap tech that are high quality. Finally, Sonders believes that a recession is not on the cards and that the current situation is nothing more than a growth scare.

Now that we have assessed the market, let’s take a look at the 7 best stocks for beginners with little money according to analysts. You can also take a look at the best defensive stocks to buy.

Our Methodology

To come up with the 7 best stocks for beginners with little money according to analysts we sifted over multiple similar rankings and ETFs to come up with safe and blue chip stocks. The rationale behind this was that investors with little money don’t afford to lose a lot and are more likely to invest in stocks that are safer or risk-free. We then sorted our stocks based on their upside potential. We have also included the hedge fund sentiment around each stock, as of Q2 2024.

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).

NIKE, Inc. (NYSE:NKE)

Analyst Upside as of September 10: 15%

Number of Hedge Fund Folders: 66

NIKE, Inc. (NYSE:NKE) is one of the best stocks for beginners with little money according to analysts. NIKE, Inc. (NYSE:NKE) is an athletic footwear and apparel company based in the United States. For the year ended 2023, the company held a market share of almost 35% in the sports footwear category in the United States.

For the fiscal year ended 2024, the company logged over $51 billion in revenue, up by 1% year-over-year. In the fiscal fourth quarter of 2024, the company made $12.6 billion in revenue, of which wholesale revenues were $7.1 billion, and direct revenues were $5.1 billion.

While the company experienced a decline in revenue for the Nike brand in North America, it was offset by the growth in China and the APLA (Asia Pacific and Latin America) region. Despite moderate revenue growth, NIKE, Inc. (NYSE:NKE) managed to deliver $6.4 billion to shareholders in fiscal 2024. Of this, $2.2 billion was paid in dividends and a share repurchase worth $4.3 billion was executed.

NKE is a consumer favorite for its high-quality athletic wear. While its sales may come across as saturated, its consistent performance is an implication of its loyal and solid customer base. Analysts are bullish on NKE and their 12-month median price target of $92 points to a 15% upside from current levels. In Q2 2024, there were 66 hedge funds that held positions in the stock with total stakes amounting to $3.19 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $732.6 million.

Mar Vista Investment Partners’ Mar Vista Focus strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:

“NIKE, Inc.’s (NYSE:NKE) stock declined following management’s revised forecast for fiscal year 2025, projecting negative mid-single-digit revenue growth instead of the previously anticipated positive growth. The company has observed a marked slowdown in lifestyle product sales since April, a trend that persisted into June. Our current projections indicate that both sales and earnings will fall 15-20% below the conservative estimates set by management just a quarter ago. This substantial downward revision in sales and earnings is attributed to insufficient product innovation, wholesale channel shift, and intentional reduction of supply in lifestyle franchises. While the negative adjustments to guidance could potentially act as a clearing event for the stock, the degree of conservatism in the new projections remains uncertain.

Nike maintains its position as the global leader in sportswear. However, its revenue growth has been hampered by a lack of innovation, and its recovery is further complicated by deteriorating macroeconomic conditions in the US and China. The company’s renewed focus on innovation and efforts to re-engage with wholesale channels may eventually help restore growth, but we believe increased skepticism regarding management’s ability to execute is justified”

Overall NKE ranks 7th on our list of the best beginner stocks to buy according to analysts. While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.

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Disclosure: None. This article is originally published at Insider Monkey.