We recently released a list 10 Benjamin Graham's Defensive Investor Stock. In this article, we will look at the positions of Nike (NYSE:NKE) and other Benjamin Graham stocks representing defensive investors.
The market in early 2025 is a bit like a moody spring – 75 degrees a day, the next storm. After a strong run in 2023 and 2024, the S&P 500 has dropped 5% year by year as investors digest a mix of policy uncertainty, lowering interest rates uncertainty and companies not performing poorly. As investors become more selective and earnings outlook weakens, many stocks are repricing. Meanwhile, the bond market quietly expressed a change. Fiscal yields are still rising, but there is growing perception that the Fed may approach the end of the hiking cycle. This makes treasury and investment-grade bonds more attractive, especially compared to volatile stocks. The market is transitioning. Investors are moving from chasing momentum to seeking quality. Caution, realism and discipline restore fashion, and so does value stocks.
Preparing for a potential recession has nothing to do with panic, but applying eternal principles, many of which were advocated by Benjamin Graham, the father of value investing. Graham teaches that the key to success in long-term investment lies in discipline, patience and a deep understanding of value. In uncertain economic times, these courses make more sense than ever. Graham says in his book Smart Investors:
“The market is a pendulum, and it is always between unsustainable optimism (which makes stocks too expensive) and unreasonable pessimism (which makes them too cheap).
Investors should not focus on building portfolios based on quality and flexibility. Graham prefers companies with strong fundamentals, conservative balance sheets and consistent income capabilities, which tend to shine when the economy slows down. Dividend payment stocks with a history of reliability are also ideal for Graham’s framework, providing revenue and security margins. Graham said in Smart Investors:
“The essence of investment management is to manage risks, not returns.”
Diversification is another core principle of Graham's philosophy that helps investors avoid overexposed to any sector or asset class. Holding various investments (equity, bonds and even cash) can make returns smoothly and provide flexibility. Graham often emphasizes the importance of retaining cash reserves, not only for protection, but also a source of opportunity when market prices become unreasonable.
“The main problem for investors, even his biggest enemy, may be himself,” Graham said. Emotional discipline, especially during turbulent markets, is crucial. By staying rational, reassessing exposures and maintaining a long-term mindset, investors can navigate the recession during a recession, making volatility as temporary as all market conditions and often brings some of the best opportunities to buy quality assets at discounted prices.
We use the classic Benjamin Graham Stock Filter from Graham Value to compile a list of 10 Benjamin Graham stocks for defensive investors. We considered the top 20 stocks on the screen and selected the stocks with the largest number of hedge fund investors as of Q4 2024. These stocks are sorted in the rising order of hedge fund sentiment.
At Insider Monkey, we are addicted to hedging stocks that have accumulated money. The reason is simple: Our research shows that we can beat the market by mimicking the top stocks of the best hedge funds. Our strategy for quarterly newsletters selects 14 small and large stocks every quarter, returning 373.4% since May 2014, beating its benchmark by 218 percentage points (See more details here).
Nike Corporation (NKE): Among Benjamin Graham’s defensive investors
A team of trainers and athletes showcasing a variety of sports and casual footwear.
Number of hedge fund holders: 73
Nike (NYSE:NKE) is the world's largest seller of sports shoes and clothing. It designs, develops, markets and sells footwear, clothing, equipment and accessories worldwide. Products are sold through Nike Direct (store and digital platforms), wholesale channels and licensees. Most manufacturing industries are outsourcing, mainly outside the United States. Key brands include Nike, Jordan and Converse. Nike emphasizes innovative, quality and consumer-centric product design, delivering performance and casual products, as well as digital services and interactive experiences to enhance customer engagement.
Nike, Inc. (NYSE:NKE) made significant progress this quarter through its “win now” strategic focus. It reignites its brand by leading sports, telling compelling athlete stories and delivering weekly product innovations. The company focuses on five key areas of gaming and invests in key markets (OS, China and the UK) as well as cities such as New York, London and Shanghai. Product highlights include the launch of Pegasus Premium and Vomero 18, while new categories such as Nikeskims expand Nike's clothing portfolio. Nike (NYSE:NKE) also emphasizes restoring wholesale relationships, improving digital experiences and reducing promotions. The brand dominated the cultural moments during the Super Bowl and NBA All-Star Weekend, strengthening its presence on both the ground and on digital platforms. These actions are designed to strengthen performance, culture and consumer connection.
Overall Ranked first On our Benjamin Graham stock list, for defensive investors. Although we acknowledge the growth potential of NKE, our belief is that AI stocks provide high returns in a shorter time frame and do this in a shorter time frame. AI stocks have risen since the beginning of 2025, while popular AI stocks have lost about 25%. If you are looking for AI stocks that are more promising than NKE but have less than 5 times its earnings, check out our report Cheapest AI stocks.
Read the next article: Buy 20 Best AI Stocks Now and According to the billionaire, there are now 30 best stocks.
Disclosure: None. This article was originally published in Inside monkey.
