Cramer Likes Nike’s Stride
Online Producer
When it comes to Nike, “Mad Money” host Jim Cramer says: Just do it.
A strong sportswear sector and related retail indicators make the company a good bet, Cramer said Tuesday, highlighting last week’s announcement that it would raise its dividend.
“I think that a company boosting its dividend is about the most bullish signal you could possibly get,” he said, “because it indicates that management has confidence in the long-term business and its prospects.”
Despite the NBA lockout that has imperiled the pro basketball season, Cramer cited the following evidence for his bullish feel on Nike:
- VF Corp., maker of North Face jackets and Vans sneakers, reported a strong quarter on Oct. 24. Under Armour, with product lines similar to Nike, delivered robust results the following day. Both companies showed powerful momentum, he said.
- Dick’s Sporting Goods reported same-store sales up 4.1 percent, well above the 1 to 2 percent increase expected. “And Dick’s sells a ton of Nikes,” Cramer said. Also, Foot Locker, which has significant European exposure, touted Germany, France, the UK and Italy as areas of strength.
- Hibbett Sports, which blew away earnings estimates by 8 cents on a 51-cent basis and raised guidance for 2012, specifically cited Nike as one of the key drivers of its success.
Cramer said buying Nike made a lot of sense heading into Black Friday and ahead its Dec. 20 earnings report, especially as a long-term play.
“Nike wasn’t crazy to raise its dividend,” he said. “The company was being sensible.”
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