Nike's (NYSE: NKE) stock isn't winning any competitions right now. Shares of the beleaguered company are down more than 30% year-to-date and trading near its 52-week low. Nike is in the middle of CEO Elliott Hill's turnaround strategy called, "Win Now." The jury is still out on whether this initiative will be a long-term success, but there is one number that investors should watch this month: $40.
This dollar amount represents the 52-week low Nike has been flirting with for the last several weeks. While timing the market and basing investment decisions solely on stock price is never a good idea, I do believe this price point will give us insight into how investors feel about "Win Now" and its progress. If Nike falls below $40, it'll be the first time in more than a decade the company has traded below that level.
Overall, it's a very bearish sign, signaling investors may be losing patience as they wait for any wins to come from "Win Now." Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » On the bright side, Nike has some positive momentum at the moment. The athletic brand received a massive tariff refund, totaling $986 million, split between two payments.
The company is also rebuilding wholesale channels and investing in teams and athletes to boost loyalty and repeat customers. A new chief financial officer just started on Aug. 17, and Nike is focused on tightening control over Chinese digital distribution as sales continue to fall there. The bottom could be near, and a recovery could soon follow.
Investors will need continued patience with Nike, as we do not yet know whether the strategy to bring back the iconic consumer brand is working as intended or how long it will take. I do not believe Nike is worth buying right now, but the long decline from its 2021 peak might soon be coming to an end. Before you buy stock in Nike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn't one of them.
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