Insider Buying

Insider Buying Report: Nike Inc (NKE: US)

Nike Inc
NKE: US
12 months:
-37%
Activity:
Bullish
Pattern:
Large Purchase from Board Member
News:
Q4 Results
Nike Inc
NKE: US
12 months:
-37%
Activity:
Bullish
Pattern:
Large Purchase from Board Member
News:
Q4 Results
A chart compares the price fluctuations of NKE stock in comparison to Insiders who have traded stock over the past year

Insider transaction activity can help investors cut through the market noise. Insiders are some of the most informed participants in the market meaning their buying and selling activity can provide investors with valuable trading signals.

In this report, we are going to highlight some interesting insider buying at Nike Inc (NKE: US). Nike is a leading manufacturer of athletic footwear and apparel and sports equipment. Employing around 80,000 people worldwide, it is the largest supplier of athletic shoes and apparel globally. The company is listed on the New York Stock Exchange and currently has a market capitalization of $159 billion.

Nike Inc: Insider Buying

Our data shows that on June 30, board member John Rogers bought 10,000 Nike shares at a price of $102.96 per share. This trade cost the insider $1.03 million and increased his holding to 25,681 shares.

Largest Insider Purchase at Nike in a Decade

This insider activity is worth highlighting for several reasons.

Firstly, Mr. Rogers is an experienced investor. Currently, he is Chairman, Co-Chief Executive Officer, and Chief Investment Officer of Ariel Investments, LLC, a privately-held money management firm he founded in 1983. This means he is likely to have a good understanding of Nike’s intrinsic value. It’s worth noting that Mr. Rogers has made several well-timed buys in recent years.

Secondly, Mr. Rogers has increased the size of his holding by 64% with this trade. This indicates that he is very confident that the stock is set to move higher.

Third, our records show that this trade represents the largest insider purchase at Nike in the last decade. This suggests that the insider sees considerable value in the offer at present.

Share Price Weakness

Nike is experiencing some challenges right now. Not only is the company suffering from supply chain issues and higher freight costs but it is also seeing a slowdown in China due to coronavirus lockdowns. These issues are hitting both revenues and profit margins. In the company’s recent Q4 results, guidance for Q1 was below estimates.

You could argue that these issues are now priced into the stock, however. Year to date, Nike shares have fallen nearly 40%. As a result, the stock now trades at just 22 times next year’s (FY2024) earnings forecast.

It’s worth noting that in Nike’s Q4 results, the company announced a new four-year, $18 billion share repurchase program. This suggests that management believes the stock is undervalued right now.

Putting this all together, we see the insider buying here as a bullish indicator.

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