CNBC’s Jim Cramer advised investors on Friday to wait for Nike shares to cool off before buying after the stock rose double-digit in a quarterly report that far exceeded expectations.
“Although the stock is far from cheap, business is booming, so you have my blessings to buy Nike the next time it pulls out,” said the Mad Money host.
Nike, which last hit a record high in January, saw stocks jump to new highs after many market participants took the wrong side of the trade leading up to the report, said Cramer, who himself is a skeptic. The stock closed at a record $ 154.35 per share on Friday, gaining more than 20 points on unusually high trading volume fueled by the surprising numbers.
“Mega-cap companies typically don’t see their stocks more than 15% on great earnings unless a lot of people were very, very wrong – or, of course, very, very briefly – when they went into the quarter,” said Cramer.
Cramer’s nonprofit trust, ActionAlertsPlus.com, has trimmed its position in the stock over the past few months in anticipation of disappointing results. The investment club will likely recharge the stock at a later date, he said.
Breaking down the fiscal fourth quarter numbers, Cramer said concerns over political ties with China, a key growth market for Nike, domestic delivery delays due to winter storm Uri earlier this year, and a slowdown in sportswear sales are a number of issues, the concerned investor.
Those concerns were all allayed after Nike topped profits by 42 cents and brought a big surprise to total sales. The company printed quarterly earnings of 93 cents per share on revenue of $ 12.34 million, almost double what it was a year ago.
“The next time an iconic company like Nike looks like it’s getting into political trouble, you have to be a buyer, not a seller, because these guys know what they’re doing,” Cramer said.