Cramer Likes Nike’s Stride

Tuesday, 22 Nov 2011 | 6:48 PM ET

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's Dividend Sends Powerful Signal
Nike's 16% dividend boost is a powerful sign its business is doing just fine, says Mad Money's Cramer, and investors should consider buying the stock in stages on the way down.

“Nike wasn’t crazy to raise its dividend,” he said. “The company was being sensible.”

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