NKE: Loss to the Little Guy

Nike caved-in, allowing 7 of its athletes to wear the controversial Speedo LZR swimsuit if they choose to at the US Olympic trials (Speedo is about 8% of WRC cash flow). This is very un-Nike-like. Those following Nike for a while and can think back to the 1992 Olympics in Barcelona when Jordan draped an American Flag over the Reebok Logo on his uniform as a sign of brand loyalty. Nike is a fierce competitor. It does not like to lose, and it likes its competition even less.

Is Nike getting soft by allowing another brand onto its turf? Not quite. Think about the PR decision tree. Nike got beat on this one. There's no way around that. Now Nike says that it is allowing its athletes to wear competing product without any 11th hr corporate pushback so that its athletes can compete without distractions. If Nike instead were to hold its ground and the athletes lose, then Nike looks bad. If Nike flexes and the athletes win, Nike is the good guy by supporting its athletes. If the athlete loses in a non-Nike product, then that fuels Nike's fire.

Is this the optimal strategy? No. It is Nike playing defense. Nike's never been too good at defense. In fact, when Nike is on defense it just makes them plain 'ol angry. Yes, this could give Speedo a bump in sales over the next quarter (likely not enough to be a financial boost to WRC). But I would not want to be in their suit 12 months out...



Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more