Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)
Twitter
Tags: Stocks
Stocks: NKE

One Popular Stock to Sell First Thing Today

By Garrett Baldwin, Executive Producer, Money Morning • September 28, 2021

View Comments

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

Garrett BaldwinGarrett Baldwin

There are plenty of obvious reasons why future doctors and virologists will be reading about the coronavirus pandemic for decades to come.

But I think economists will be studying this era for the next 100 years, easily, and probably a lot longer. They'll have a field day analyzing the consequences of massive disruption to the world's just-in-time supply chain; the Glitch That Launched 10,000 Economics Masters' Degrees.

Right now, though, this situation means investors have some hard choices to make. Plenty of companies are not going to make it through this unscathed, no matter how much press you hear about "contingencies," or how the disruptions "aren't a big deal."

Earnings from this most recent quarter make it clear that there's some trouble brewing - and consequences that won't be put off much longer.

That's why I'm making a "Sell" recommendation on these shares today...

Everyone Is Short of Everything Now

The shortages most of us saw in the beginning of March 2020, when it was tough to find toilet paper, were just the start of a disruption that continues to this day. Eighteen-plus months later, and some of us can't get our decks re-done, and holiday shopping looks iffy.

There are labor shortages worldwide; workers holding out for more money, workers caught up in COVID-19 shutdowns, workers with visa problems, workers with childcare problems.

Sign up for SMS so you never miss special events, exclusive offers, and weekly bonus trades.

There are shipping disruptions; ships like the Ever Given don't often get stuck sideways in the Suez Canal, but there's a near-constant shortage of port and dock workers from Shanghai to Los Angeles. This past weekend, we saw striking images of dozens upon dozens of container ships idling off the coasts of the ports of New York and Long Beach, waiting to be unloaded.

And there are raw materials shortages, because there aren't always enough workers to produce or extract them, let alone enough ships to get them from A to B. There are constant bidding wars on raw materials and shipping, both of which manifest as higher prices for consumers.

It'd be disingenuous to point to one single force as the culprit. I could go on, but A.P. Moller-Maersk CEO Søren Skou pretty much hit the nail on the head when he said the sources of disruption were "everywhere" in the global supply chain.

Most experts weren't sure how long these disruptions would last when they became apparent; some talking heads in March 2020 said "things will be back to normal in three weeks," whereas other, more bearish analysts said the problems were "permanent, a fact of life from here on out." The truth is somewhere in between, and the delta variant of the COVID-19 virus is a big X-factor here, but most credible estimates point to problems persisting until at least the middle of 2022.

That's a long time to wait when you've got sinking stocks in your portfolio; these disruptions are weighing on certain stocks now, especially this one...

Unload Your Shares - Just Do It

Nike Inc. (NYSE: NKE) is just one stock in serious trouble today, and its latest earnings call should really be seen as a canary in the coal mine for lots of other companies with global supply chains.

Nike earnings last week were a very mixed bag; there were beats on income but misses on revenue - and lowered guidance, too. It cut its full-year sales outlook during a time of virtually unprecedented demand. Pre-delta, Nike had been expecting double-digit revenue growth, thanks to that demand, but now expects it to grow by less than 10%.

On its earnings call last week, company honchos pointed to a shortage of shipping containers and locked-down workers - labor shortages and port and transportation congestion. The time it takes for Nike to ship products from its Asian factories to North American consumers is now 80 days - about double the pre-pandemic travel time.

In order to salvage some semblance of a holiday season, the company said it's planning to spend more on air freight, as opposed to ships. That's going to eat into profits, too.

Will the disruptions last forever? I don't think so. Could they last a long time yet? Definitely. Owning Nike, a stock that's up less than 6% for the year, throughout the global supply chain misery, is a lot to ask; its 0.7% dividend - less than one-fifth the official inflation rate - doesn't really make a compelling case for sticking it out, either.

Sell Nike at market, for whatever you can get for it. The company is in reasonably strong financial shape, and I think it has the power under the hood to weather the supply chain disruptions and ride out the storm - but don't stay along for the ride. Instead, revisit this stock in mid-2022, when, maybe, it'll be time to get back in.

Look at this stock now, though - a $2 EV company that's been on a 1,140%-plus rocket ride over the past year. This firm is looking to list on a major exchange as soon as it possibly can, and when that happens... watch out: a repeat of its quadruple-digit run could very well ignite over the next 12 months. I'm not talking about a $5, $10, or even $15 stock here, but possibly over $20 within a year. Take a look at the details here.

Follow Money Morning on Facebook and Twitter.

Join the conversation. Click here to jump to comments…

Garrett BaldwinGarrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

… Read full bio

Login
guest
guest
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
CaptTurbo
CaptTurbo
1 year ago

NKE Couldn't happen to a better company. Go woke, go broke.

0
Reply
Eric F
Eric F
1 year ago

Seems like you actually picked the bottom. Would have been better if you made your call a month or 2 earlier or waited to see if t broke the 200 moving avg.

0
Reply


Latest News

June 2, 2023 • By Nick Black

Market Roundup: Digital Assets to Watch for the Weekend of June 2

June 2, 2023 • By Shah Gilani

earnings
How to Profit on a "Bankruptcy Wave" Hitting Markets Hard

June 2, 2023 • By Garrett Baldwin

Postcards: Take Gains Ahead of OPEC
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts Resource Traders Alliance

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz