He said if a company has good management, that means they just aren't screwing up. Nike (NKE) and Under Armour (NASDAQ: 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 Inc. B (NYSE: 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 is cheaper and more defensive in nature as it tries to preserve the market share it has. UARM is a high-multiple stock that would crumble if the company messed 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 the 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.
He says Nike Inc. B (NYSE: 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 is cheaper and more defensive in nature as it tries to preserve the market share it has. UARM is a high-multiple stock that would crumble if the company messed 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 the 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.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
11-17-2006 @ 3:07AM
gudipudi said...
i go for NIKE .....
11-17-2006 @ 10:52PM
pauljbokowy said...
Having 3 kids I know that UARM is the sport apparel that the kids prefer,and the sport athletics are wearing UARM more and more I see this stock going up a little faster then NKE stock.I think the best thing to do would be BUY both stocks and that should make money in the long run.
11-18-2006 @ 8:56AM
Michael Schneider said...
Yes to Cramer's view. Retail had a slow October and a slow start November according to Dana Telsey. However, it is the season to focus on retail and some money may come out of retail store stocks and into apparel since the winter started early. I suspect those will turn out as good picks though the gains might not be huge.
11-19-2006 @ 3:57AM
Naty said...
Adidas for ecer!! I am glad to see that now they can win Nike!
11-20-2006 @ 12:31PM
cljolly said...
I was surprised to see that Nordstrom is carrying Under Armour at the California Governor's Conference for Women. If this apparel appeals to athletes and to the high ticket customers - they are goind something right - I have some shares - but wish I could afford more with the associated risk.