Nike's Drop Will Offer a Great Dip... Soon!

9 ביולי

Nike's stock has dropped 30% this year and nearly 60% from its 2021 highs. It continues to drop, and now, I am worried that they will soon suspend their dividend to move cash flow into other areas that need to support the business.

I believe Nike may reach a low close to its COVID-19 crash levels, presenting a buying opportunity for patient investors as I've marked on the chart with the red circle. As Warren Buffett once said, "Be fearful when others are greedy and greedy when others are fearful." I think that moment is coming with Nike.

Here are two tips for buying dips:

1. It can always go lower than you think so it's better to wait for some signs of a reversal rather than perfectly catching the bottom.

2. Set alerts so that you're ready and can get alerted with the time comes.

Now, why has Nike fallen like this? Several factors contribute to this decline:

1. Margin Pressures: Rising raw material and labor costs have strained Nike's profitability, causing investor concerns.

2. Product Control Issues: Expanding its product range has led to inconsistent quality and inventory management problems.

3. Excessive Product Range: The overwhelming number of products has confused customers and diluted the brand.

4. Increased Competition: New, agile brands are capturing market share, challenging Nike's dominance.

This one is on my watchlist! Let's see what happens next. I'll update you all rather soon.