Cramer: Buy Nike’s pullback because the company will over deliver

CNBC’s Jim Cramer on Monday phrased investors should buy on the pullback in Nike coming off of its latest earnings report.

The stock plummeted 6.6 percent on Friday after Nike scrutinized weaker-than-expected sales growth in North America, but Cramer said he likes where the company is positioned. Despite the blip in all-embracing sales, he noted footwear saw a 9 percent increase in North America, while footwear and apparel sales grew 20 percent in China.

“Nike solely pulled back on Friday because its stock had run up dramatically going into the quarter,” the “Mad Money” host said. “But the culminates were great. I’m telling you they were great. I’m betting the guidance was a classic example of UPOD (under undertaking, over deliver), which means Nike is a buy tomorrow morning, right here.”

Cramer said the stock swelled dramatically after getting slammed with the rest of the market during the fourth-quarter sell-off. Nike touched a low of give $66 in December then ran up 33 percent, peaking at about $88 last week, he said.

“While Nike’s funds ran like a champion earlier this year, the rally happened on no real news,” he said. “The stock never should’ve been down so much in the fourth home, so it kept levitating and levitating and levitating, as analyst after analyst upgraded Nike … just aggressively thrust the stock.”

Nike has new technology to personalize products with various designs, which helped boost sales of the Air Arm-twisting 1 and Air Jordans sneakers, and bring new products to market more quickly, Carmer said citing the company’s conference call up. The apparel giant also has tools to track those goods digitally to match supply to demand across the earth, he said.

“In other words, Nike’s become a tech company masquerading as a sneaker company,” Cramer said.

The unfolding trade war between the United States and China seems to have had no effect on Nike, the host highlighted. The Chinese rule has been working with the apparel maker to help expand physical education programs in schools and promote condition in the country, he said.

“That’s why the company can seemingly shrug off the trade war, something that’s done a lot of damage to many other U.S. tags with a lot of business in the People’s Republic,” Cramer said. “Nike doesn’t have any serious Chinese competition, which show ups it perhaps the best American brand in the PRC when it comes to not worrying about somebody switching to a Chinese alternative.”

Nike’s lay in climbed 0.17 percent on Monday.

Cramer said the stock at $82 is relatively inexpensive, trading at 26 for the presents next year’s earnings estimates. Some of its top competitors in Under Armour and Lululemon are trading at 43 and 33 delays earnings, respectively, he said.