This Stock Has Fallen 35% YTD And Is Now 'The Definition Of Quality On Sale'

Hightower Advisors' Stephanie Link bought Nike Inc NKE shares ahead of earnings next week and is prepared to buy more if it sells off further.

What To Know: Link didn't want to pick up a full position ahead of earnings because she expects the retailer to report weakness in China.

"But I think at down 36% year-to-date, a lot of that is already in the stock," she said Tuesday on CNBC's "Fast Money Halftime Report."

If weakness in China isn't already priced in and the stock trades lower on earnings, Link plans to increase her position, as she expects recent changes to the company's business model to help push the stock higher moving forward.

"They do have a very good program to get more DTC focused and that will help margins, as will their cost-cutting program, and they have pricing power," Link said. 

From Last Week: Here's How Much You Would Have Made Owning Nike Stock In The Last 15 Years

Nike has laid out plans to reach the mid-teens in EBIT by fiscal year 2025, which will lead to better operating margins as demand comes back, she said. Link noted that Nike will have easy comparable numbers in the second half of the year, which should be a catalyst for the stock. 

"So if it's weak on earnings, I'll buy more. I left myself plenty of room, but this to me is the definition of quality on sale," Link said.

Nike is set to announce its fiscal fourth-quarter financial results after the market closes on June 27. Analysts expect the company to earn 83 cents per share on revenue of $12.21 billion, according to data from Benzinga Pro.

NKE Price Action: Nike has traded between $179.10 and $103.46 over a 52-week period.

The stock was up 1.91% at $109.39 at press time.

Photo: StockSnap from Pixabay.