Cramer Backs Nike and Under Armour
Last night on CNBC's MAD MONEY, Jim Cramer reviewed two stocks in the same sector that are both buys. He said which one you should own depends on your preference.
He said if a company has good management, that means they just aren't screwing up. Nike (NKE) and Under Armour (UARM) got lucky because Reebok screwed up by cutting marketing. Reebok's ad budget was only $7 million after Adidas bought them, and these two won as a result.
Cramer says that even though NKE and UARM are competing, they are different stocks for different investors. He says both are buys.
He says Nike (NKE) is the best for longer-lived investors that look for more stability and more predictability. He noted Under Armour (UARM) is the younger investor's stock that has a lot of room for growth down the road.
NKE trades cheaper, and is more defensive in nature trying toi preserve market share it has. UARM is a high-multiple stock that would crumble if the company messes up. Cramer said UARM's 31% market share could pass NKE's 36%, but UARM could take market share and NKE stock could still keep rising because they are different stories. He thinks UARM will take market share from Reebok since they aren't defending the brand. UARM is one that will get hurt bad if they ever miss an estimate by a penny, and NKE is the stable lion in the group.
UARM closed down 1.28% at $46.25 in regular trading, but shares are up almost 3% from teh close at $47.50 in after-hours trading. NKE closed down 0.25% at $95.23 in regular trading, but shares are up 0.9% at $95.92 in after-hours trading.
Jon C. Ogg
He said if a company has good management, that means they just aren't screwing up. Nike (NKE) and Under Armour (UARM) got lucky because Reebok screwed up by cutting marketing. Reebok's ad budget was only $7 million after Adidas bought them, and these two won as a result.
Cramer says that even though NKE and UARM are competing, they are different stocks for different investors. He says both are buys.
He says Nike (NKE) is the best for longer-lived investors that look for more stability and more predictability. He noted Under Armour (UARM) is the younger investor's stock that has a lot of room for growth down the road.
NKE trades cheaper, and is more defensive in nature trying toi preserve market share it has. UARM is a high-multiple stock that would crumble if the company messes up. Cramer said UARM's 31% market share could pass NKE's 36%, but UARM could take market share and NKE stock could still keep rising because they are different stories. He thinks UARM will take market share from Reebok since they aren't defending the brand. UARM is one that will get hurt bad if they ever miss an estimate by a penny, and NKE is the stable lion in the group.
UARM closed down 1.28% at $46.25 in regular trading, but shares are up almost 3% from teh close at $47.50 in after-hours trading. NKE closed down 0.25% at $95.23 in regular trading, but shares are up 0.9% at $95.92 in after-hours trading.
Jon C. Ogg
posted by douglas mcintyre at 4:23 AM
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