Nike ( NKE ) growth prospects have snagged the attention of Bill Ackman's Pershing Square Capital Management, which has built a stake in the sportswear giant.
[ibd-display-video id=3107223 width=50 float=left autostart=true] The hedge-fund billionaire told investors at an event Thursday evening that the position, initiated last year, already has earned a 30% return, according to Reuters and other reports. The size of the stake in Nike has not been disclosed.
Ackman, a widely followed activist investor, does not plan to push for changes at Nike. He reportedly sees the investment as a passive bet and bought the Dow apparel giant when shares were trading at around 53.
Nike shares rose 0.6% to 68.09 on the stock market today , holding near all-time highs of 68.64 set in Thursday's session. Shares have advanced 20% after breaking out of a first-stage, cup-with-handle 57.35 buy point in 11 weeks.
Adidas ( ADDYY ), which has made a strong U.S. comeback, also rose 1% within a multimonth consolidation early Friday as it eyes a 119.08 entry. Under Armour ( UAA ), which has struggled recently, slipped 0.8%. Amazon ( AMZN ), the e-commerce giant with whom both Nike and Adidas have started to partner, gained 1.3% for a new high of 1,395.54.
IBD'S TAKE : Amazon is moving in on traditional retail's turf in more ways than one. This smart move from the e-commerce giant is giving apparel companies a run for their money.
Ackman's Pershing Square, with roughly $9 billion in client money, has suffered three years of losses and some high-profile defeats. Ackman plans to spend more time on investment ideas and leave marketing to others.
Oregon-based Nike topped Q2 forecasts in December despite a soft North American market and intense competition from Adidas, Under Armour and emerging rival Puma. Nike plans to focus on technological innovation , international markets and direct-to-consumer sales as it targets a goal of high-single-digit revenue growth and midteens profit growth over the next five years.
The footwear and clothing giant's stock is up 9% year to date following a 25% gain in 2017.
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