Immediately after the opening bell, we exit our position in Nike and sell 1,600 shares at approximately $41 per share. After Wednesday’s transaction, the Jim Cramer Charitable Trust will no longer own a position in NKE. After another disappointing financial report, we move on from Nike. This quarter showed some signs that management’s turnaround strategy is gaining momentum, but progress remains slow. We were encouraged to see management approach inventory more aggressively and reduce markdowns to improve gross margins. On the silver lining, the company still believes it is just two quarters away from turning its business around, meaning a return to year-over-year sales and profit growth. However, our concern is that even if growth returns, the recovery may not be as sharp as previously expected. It was a mistake to think that the company could resolve Greater China in a timely manner and underestimated the impact that competition would have on Nike. Investor’s Day, scheduled for November, could actually be a bright spot and a catalyst if stocks are clean ahead of the event. Selling now and realizing a 40% loss is a tough pill to swallow. But we have to ask ourselves whether it’s worth tying up capital for another 4-5 months in a stock that may remain dead money. Our answer is rather to put this money back elsewhere and put it into other stocks with cleaner growth stories. I plan on using this cash to buy a few things later in the session. stay tuned. (Jim Cramer’s Charitable Trust is a long NKE. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
