To The Moon

$Nike(NKE)$ announced plans to reduce its reliance on Chinese production to counteract the impact of U.S. tariffs, which could increase costs by $1 billion. The company plans to shift production to other countries and implement supply chain optimizations. Despite a forecasted revenue drop, Nike's shares rose 11% in extended trading, reflecting investor confidence in its mitigation strategies.

Navigating tariffs isn’t just about dodging costs; it’s about building resilience and competitive advantage. Let’s break this into two parts: mitigation strategies and moat-building opportunities for U.S. companies facing tariff headwinds.

Tariff Mitigation Strategies for U.S. Stocks

Here are the most effective, real-world strategies companies are using to soften the blow of tariffs:

Pro tip: Companies that act early — before tariffs hit — tend to outperform peers who “wait and see”.

Moats That U.S. Stocks Can Build Amid Tariff Pressure

Tariffs can actually strengthen competitive moats for companies that adapt faster or smarter than rivals:

Case in point: During the February 2025 tariff volatility, moat stocks outperformed mega-caps, showing resilience due to diversified exposure and pricing power.

Now I think in order for us to better plan out our trading strategy, we need to zero in on specific U.S. stocks that are best positioned with durable moats and strong tariff resilience.

In this section, I will be sharing a screening framework which we will walk through to find more of such stocks.

U.S. Stocks with Strong Moats & Tariff Resilience

These companies combine pricing power, domestic production, and supply chain agility, making them well-equipped to weather tariff storms:

How to Screen for Tariff-Resilient Moat Stocks

In this section, I would like to share how we can use a practical framework in a screener. (e.g. Finviz, MorningStar, or Seeking Alpha).

1. Moat Strength Filters

Return on Capital Employed (ROCE) > 15%

Gross Margin > 40%

Free Cash Flow Margin > 10%

5Y Average ROE > 20%

These metrics help identify companies with durable competitive advantages and capital efficiency.

2. Tariff Resilience Filters

% of Revenue from U.S. > 70%

CapEx / Revenue > 5% → Indicates investment in domestic infrastructure

Inventory Turnover > 5 → Agile supply chains

Low Import Exposure (qualitative) → Check 10-K or investor presentations

3. Qualitative Moat Signals

Recurring revenue (e.g. subscriptions, memberships)

High switching costs (e.g. software, defense, healthcare)

Regulatory barriers (e.g. pharma, defense)

Brand loyalty (e.g. consumer staples, luxury)

Top U.S. Moat Stocks with Attractive Valuation Metrics

Using the same tools, here is a shortlist of companies that check all three boxes: strong moat, tariff resilience, and attractive valuation based on PEG and FCF yield:

Source: FinanceCharts, Eqvista PEG by Industry

$Salesforce.com(CRM)$ $Walt Disney(DIS)$ $Qualcomm(QCOM)$

How to Use This for Entry Timing

This is the criterias that we can actually used to look for entry timing.

1. PEG < 1.5: Indicates growth is not overpriced — ideal for moat stocks with upside catalysts.

2. FCF Yield > 4%: Suggests strong cash generation — a buffer against macro shocks like tariffs.

3. Entry Signal: Use technical levels (support/resistance) + RSI/MACD to time entries.

Bonus Screener Criteria You Can Use

Here are some more criteria that we can use to screen for more stocks like this.

1. PEG < 1.5

2. FCF Yield > 4%

3. ROCE > 15%

4. U.S. Revenue Exposure > 70%

5. 5Y Avg. Gross Margin > 40%

6. Dividend Payer (optional for stability)

One Company Stand Out From These Screener Criteria : Costco (COST)

I am going to use Technical Analysis to check if Costco (COST) has potential for better upside and also benefiting from its tariff mitigation strategy.

If we looked solely at EMA and RSI momentum, the bulls seem to lose the defense over the short-term period level, but we are seeing the RSI momentum still holding on, which mean that the bulls are still trying to attempt for a daily uptrend continuation.

But we need the bulls to take back the control, if not, we might see COST suffer a pullback, but we might need to look at it as an opportunity for entry point.

Summary

Nike faces a substantial cost headwind from U.S. tariffs on Chinese imports, estimated at around $1 billion by fiscal 2026. Nike's strategy offers a blueprint for other companies facing similar geopolitical or supply chain pressures. We as investors should look for the following characteristics and actions in other stocks.

By identifying companies that are not just reacting to tariffs but strategically transforming their supply chains and business models, we as investors might potentially find long-term winners in an increasingly complex global trade environment.

Hope this article helps fellow investors to screen and look for potential stocks.

Appreciate if you could share your thoughts in the comment section whether you think using fundamental combined with TA would help to screen for stocks that could benefit if they implement tariff mitigation strategy like how Nike did.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.