Nuveen CIO: these two giants are on sale right now
- Saira Malik expects markets to remain volatile due to inflation and Ukraine war.
- She says Microsoft and Nike are buying opportunities at current valuations.
- MSFT and NKE are down over 15% and over 25% year-to-date, respectively.
Markets will likely remain volatile ahead on a double whammy of record inflation and the geopolitical tensions, says the chief investment officer of Nuveen.
Malik’s bull case for Microsoft
Saira Malik, however, agrees that the ongoing volatility has brought valuations down enough for investors to buy quality names at a deep discount. One of her top picks in the mega-cap tech space is Microsoft Corp (NASDAQ: MSFT). On CNBC’s “Squawk Box”, she said:
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We like quality compounders; companies like Microsoft here. This is an all-weather stock, strong free cash flow, potential margin expansion. In a Nasdaq down 20%, we think companies like Microsoft are looking interesting here.
Microsoft reported another record quarter in late January. Still, the stock is down more than 15% year-to-date.
Why Malik likes Nike Inc?
From the valuation perspective, Malik also likes Nike Inc (NYSE: NKE) at present, down over 25% for the year with a PE multiple of 31.32. Making her bull case for Nike, she said:
You can get a buying opportunity in the global brand leaders like Nike when it reports earnings later this week and talk about its exposure to Europe and China. Looking at Nike bigger picture, it has a lot of brand heat and increasing margins as it moves more to direct-to-consumer.
Last week, Nike said it was on track with the majority of its longer-term targets for 2025.