Foot Locker, Inc. (FL) Stock Is a High-Value, Double-Digit Earner

Foot Locker, Inc. (NYSE:FL) hasn’t been sizzling like the broader market in 2017 specifically, but FL stock has still managed to book 18% gains over the past 12 months. Word on the street right now is that retail, as an industry, is in trouble. And there are definitely some red flags in terms of retail’s overall trends and numbers. But investors need to be careful not to throw out the baby with the bathwater.

Foot Locker, Inc. (FL) Stock Is a High-Value, Double-Digit Earner

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That’s why one of my favorite stocks to buy right now is FL stock, which offers an impressive track record, double-digit growth and presents a great value.

Currently, FL stock is sitting above its 200-day moving average, but right below its 50-day. Once that short-term average turns into a base, I’m quite confident Foot Locker shares can continue climbing.

Try FL Stock On for Size

In late February, Foot Locker posted its seventh straight year of “meaningful” sales and profit growth. Basically, it’s been a sure bet since the Great Recession ended.

Over the past five years, earnings growth has averaged a whopping 18% annually — hardly foreshadowing the demise of this retail pick. Instead, Foot Locker has proven that management understands how to grow its business, whether that means cutting costs, adding children’s stores or growing online sales. You don’t stumble upon consistency — you create it.

That’s why, looking forward, it should come as no surprise that double-digit growth continues to be on-tap. In fact, Wall Street has been raising the bar for Foot Locker’s numbers over the past few months. Full-year estimates have expanded from $5.27 to $5.41, the new estimate representing more than 12% year-over-year growth. Meanwhile, next year’s consensus has grown from $5.78 to $5.87 — an additional 9% expansion.

Bottom Line on FL Stock

Despite these numbers and the stock’s outperformance over the last year, shares of FL stock are hardly frother. A forward price-earnings of 12 is more than reasonable, especially considering Foot Locker’s earnings growth is accented by a dividend yielding just shy of 2%.

When an industry is facing headwinds, it’s good to do your due diligence about any picks within it. Plenty of retail chains aren’t posting any comparable sales growth, are closing stores, are watching earnings contract, and so on. Foot Locker isn’t one of those chains. It has a diversified portfolio of stores and brands, and that’s translated to rock-solid fundamentals for some time.

I fully expect FL stock to continue its upward trend in the near future. Wall Street analysts are getting increasingly optimistic about coming years for a reason. It’s only a matter of time before Foot Locker’s 2017 results mirror those growing expectations.

Hilary Kramer is the editor of GameChangers, Breakout Stocks, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.

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