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FL STOCK WRITE UP

FL (FOOT LOCKER)

  • P/E: 15.2
  • GAAP DILUTED YO-Y EPS GROWTH LAST QUARTER: $.28
  • SECTOR: RETAIL TRADE
  • ASSETS-LIABILITIES: 3.39
  • DIVIDEND: 1.68%

According to statisticbrain, Foot Locker was the largest shoe retailer in the United States as of 8/13/2016. Foot Locker posted a 24.5% year-over-year EPS gain in the most recent quarter, meaning its successful business is still growing. The company has a low price-to-earnings multiple and a high rate of growth with solid financials, giving the stock room to climb.
While many retail stores have faired poorly due to the recent emergence of Amazon and other online retailers, Foot Locker does not suffer because their services are hard to duplicate online. You can not try on a shoe from Amazon prior to purchasing, for example. For customers who do not need to try on the shoe, either because they have already purchased the same shoe, or have tried on shoes of the same brand, Foot Locker also sells shoes through Amazon. In this manner, Foot Locker is utilizing the expanding online shopping market, while still having the fortune to be positioned in a retail sector which typically requires the customers' physical presence due to discrepancies between manufacturers' standards.
Foot Locker has an impressive ratio of assets to liabilities at 3.39. This means they have great flexibility with spending for improvement of store fronts, research, advertising, and development. The company also realized a slight increase in gross margin in their last quarter. They offer a dividend to investors, and the stock price is undervalued at a price-to-earnings multiple of approximately 15.2. The stock has the means, demonstrated business practices, and market position to grow.

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