Nike, Still Got Game?

Nike reports earnings on Wednesday after the market closes. With the stock down 11% year to date, is it cheap?

As investors ponder whether the stock is fairly priced at current levels, some suggest Nike is facing an uphill battle; they worry that the recession is catching up with the company – and that a stronger dollar is crushing profits made overseas.

Nike had been one of the more resilient companies during the economic downturn largely due to the strong appeal of its brand but even Nike might not be able to remain unsigned by a recession of this magnitude. The firm is, however, actively managing costs – that includes cutting as many as 1,400 jobs, or roughly 4 percent of its work force, as part of a restructuring.

Nike previously took other steps to control costs, such as implementing a hiring freeze and cutting travel and other operating expenses. It also tightened its inventory controls.

What’s the trade?

I think they have an absolutely phenomenal balance sheet, says Pete Najarian. I think you can trade Nike as a surrogate for global growth.

At 12 times forward earnings the stock looks interesting to me as well, adds Guy Adami, but keep an eye on inventories. They need to be coming down.

Nike is growing in China, reminds Joe Terranova and they’re able to charge premium prices. That too should be a tailwind.

Jeff Macke isn't having any of it. The stock is becoming a non-growth story, he bristles.

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Trader disclosure: On Mar. 17th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (GE), (GS), (MS), (MOS), (AAPL); Macke Is Short (BRK.b); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU) ; Terranova Owns (MA), (AAPL), (RIG), (CVX), (GS), (AMZN), (BP), (KCE), (JPM), (X), (POT), (WYNN), (XBI), (HESS), (INTC), (BRCM), (DELL), (JOYG), (FXC), (MS), (XOM); Terranova Owns (AMGN) & (AMGN) Puts; Terranova Owns (IBM) Spread; Terranova Owns (DIS) & (DIS) Calls; Terranova Owns (COP) Calls; Terranova Owns MACI Oil Futures; Najarian Owns (GDX); Najarian Owns (C) Call Spread; Najarian Owns (FCX) Call Spread; Najarian Owns (GD) Call Spread; Najarian Owns (X) Call Spread; Najarian Owns (GLD) Put Spread; Najarian Owns (JPM) & (JPM) Calls; Najarian Owns (MS) & (MS) Calls; Najarian Owns (MSFT) & (MSFT) Calls; Najarian Owns (WFC) & (WFC) Puts; Najarian Owns (XHB) Call Spread; Najarian Owns (XLI) Calls