Hello Investors,
A compelling reason to consider a closer look at Nike (NKE) stock today is the rare and high-profile insider buying by Apple CEO Tim Cook, who serves as Nike’s lead independent director and recently spent nearly $3 million to purchase 50,000 shares at about $58.97, more than doubling his stake and signaling confidence in Nike’s turnaround strategy at current valuation levels.
While the stock has been beaten down it still trades at a high valuation relative to its sector. These insider buys signal a vote of confidence that Nike is navigating through its operational challenges and suggest that the market may be pricing in excessive pessimism? This may be creating a valuation entry point for long-term investors who believe in the company’s brand strength and strategic reset.
We don’t think we need to chase the stock higher on the news. However, we can use the Tim Cook price level of $59/share as a key support zone. It is highly likely that if/when the stock goes back to those prices it will be a level where a lot of buying takes place from market participants. You see much the same thing happen with Berkshire/Warren Buffett purchases. The levels they are buying are huge support for the stock going forward. And if buyers keep buying at those levels in the future, it is less likely to fall sharply below that zone. We are selling a put just below the Tim Cook price zone of $59/share as follows:
This is only a reasonable strategy if willing to own 100 shares of stock at 57.50/share (investment of $5,750).
Sell to open: NKE June 18th, 2026 (monthly) 57.50 strike put
Credit: 3.35
Max reward = 3.35 or $335.00 per contract
Max risk = buying 100 shares at 57.50 per shareWe took the $335 of income and bought 5 shares of NKE stock at 62.30 per share.
Bought 5 shares of NKE at 62.30
Total cost of $311.50. We put the rest of the $23.50 in our cash pile.