John Rogers, a director at Nike (NKE), recently bought 2,500 shares. The buy increased his stake by 8%, and came to a total cost of $191,625.
This marks the first insider buy since last June, when another director bought 2,941 shares, increasing his position by 15%. Otherwise, there have been a handful of insider sales in the second half of 2024, largely from the company’s Chairman of the Board. Going further back, insiders were also likely to be sellers.
Overall, Nike insiders own 1.7% of shares.
The athletic apparel manufacturer slid 30% in 2024, on the back of poor operational performance. Revenues dropped by a full 10%, and earnings slid by 28%.
Nike has struggled in recent years, due to shifting consumer trends and an increased reliance in global sales that has sometimes failed to pay off in terms of growth.
Even after selling off substantially, shares trade at 23 times earnings, about in-line with the overall stock market.
Action to take: Investors should hold off on buying shares for now. While Nike is still a strong global brand, today’s headwinds will likely continue to weigh on shares in the short-term. Nike currently pays a 2.1% dividend, but a further selloff could push that yield higher.
For traders, it’s likely that shares have more downside in the months ahead. The June $65 puts, last trading for about $1.60, could see mid-to-high double-digit returns on a continued slide in Nike shares in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.