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Foot Locker, Inc. (FL)

NYSE - Nasdaq Real Time Price. Currency in USD
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30.37+0.60 (+2.02%)
At close: 04:00PM EDT
30.26 -0.11 (-0.36%)
After hours: 06:22PM EDT
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  • M
    Marco
    Simple math is always best:

    On their last 2 acquisition they paid approximately 2x revenue for the company. (WSS & Atmos)
    So that is the current business valuation in the retail industry for takeovers/acquisitions.

    2x Foot locker revenue is 16B. Lets be very verd conservative and make it a 10B Company minimum!
    200% upside potential.
    + dividend
    +stock buybacks (of course, at these prices)

    Glta
  • B
    Bunny
    Yahoo's estimate of 35.86% growth per year for the next 5 year is achievable considering the share count has come down drastically from 148.5 millions to less than 97 millions and decreasing. It is great allocation of capital in buying back significantly under valued shares. The lower the share price now, the more it can buy back the shares, the better the EPS moving forward. Buy more.
  • G
    Gene
    FootLocker ($29.64) seems to be insanely cheap here. it is priced at only about 1.5 tangible book. The foolish flow ratio is about 0.9. They have lots of cash. A nice dividend which pays new owners to wait for the stock price appreciation. PE is low. FCF yield is about 15.6%.

    It is true the company's earnings could drop. They almost certainly will drop. But even at pandemic (we've shut you down) lows the PE would still be very close to 10. And that is the worst case here.

    Earnings will drop because margins will compress a bit from the last two years when inventories were tight and mark downs were limited. Also of course there is the Nike thing. But Footlocker will still be making money. Will still be cash flow positive. Will still have the dividend covered. Short of another pandemic type storm the dividend will be fine from here.

    It is true long term growth isn't really a thing here........well they aren't in a growth industry. But just because a company is no longer growing doesn't mean you can't make money from them. The tobacco industry is a perfect example of a dying business. But they have managed to pay high dividends and buy back shares faster than earnings have dropped. Therefore the dividends and eps continue to increase for them.

    FootLocker has plenty of access cash flow to continue buying back shares which will support the earnings per share and at the same time also reduce the payout ratio making the dividend even more secure. In the mean time we collect 5% plus yield. Eventually the stock price will rise above $30 simply because even a no growth company is a good deal at a PE of 10 (earnings yield of 10% a year). For example at $4 eps per year the stock should be at $40.

    Another risk is just an overall economic recession. But there isn't anything that will be as bad as stores being forced to close. So again at this price the floor would seem to be in. A pandemic scenario PE of 10 is where we are currently at. Anything better than that an eventually the market adjust and the stock rises. If the company has revenues go up and or earnings per share go up the stock price will appreciate.

    I'm writing this because the long term worst case scenario is priced in. Anything that turns out not to be the worst case means a higher share price. Perhaps twice as high. In the mean time whether it is a 1 to 3 year wait we collect a pretty nice dividend in an economy that is hard to find safe returns.

    The future in my opinion of this stock is as a dividend stock. The balance sheet and average cash flows make it so easy for the company to become a dividend growth compounder. With the buybacks they can continue to increase the dividend (without increasing the already very safe payout ratio).

    From the today's current stock price the only real downside in terms of price is simply getting dragged down further with the rest of the market. I think long term Nike will regret cutting out their partners. If we have another downmarket day I'm going to nibble here and grab some shares.
  • F
    FFB
    FL:

    Mkt Cap: 2.7B
    Cash: 800m
    Goat investment value: 600m
    Core business value = 2,700-800-600 = 1,300

    Owners earnings have been greater than 330m and closer to 600m over the last 8 years. Even with Nike pulling back, it can’t be worse than stores being closed like 2020 when net income was 300m. If earnings drop to 2020 levels, it is still nearly a 25% return on the 1.3B core business valuation.
  • E
    Elon Musk Jr.
    Long term contract with Adidas secured let's go.
  • B
    Bunny
    PUMA reported great sales increase and FL has contributed to the increase of sales of Puma and Adidas beyond Nike.
  • B
    Biblioguy
    Foot Locker has been repurchasing a good amount of its stock lately. The first page of its 10K states that shares outstanding as of March 21st were 96,089,997. At fiscal year end on January 29th, shares outstanding were 97,020,796. Hopefully they can continue repurchasing one million shares per quarter. At recent prices and given the current dividend, I think the stock is a compelling bargain for both investors and for stock repurchases.
  • D
    Dennis Paul
    Cracks sales are up all the g's are getting new kicks. time to rock et up.
  • B
    Bunny
    The number of shares is coming down fast. The power of buyback at low price is excellent.
  • B
    Bunny
    Yahoo's Analyst projection of growth for the Next 5 Years (per annum) - 35.86%. That will be excellent year judging from the tug-in acquisitions to expand in Japan, e commerce and rolling out new stores.
  • S
    S1992
    Adidas announces Foot Locker basketball apparel partnership
    The collaboration will also give Foot Locker a lead role in a new Adidas lifestyle sportswear collection, the company said.
  • B
    Bunny
    World Cup 2022 will spur spending on footwear along with Adidas is partnering with FL to increase sales world wide.
  • K
    Kevin
    So so undervalued
  • E
    Eric
    this one is really overlooked...if their buyback plan is going to work, this can be an easy triple opportunity, hope we dont have ER crash again....
  • B
    Bunny
    I went to a mall today at 2 P.M and had a channel check on FL. I have seen that FL has actually expanded with Kids FL. There were line-up at the counters and business look very good. I can see that the traffic are back and sales for FL sales should be growing.
  • K
    Kevin
    Way undervalued
  • B
    B.D.
    Jusy buy Nike.
  • B
    Bunny
    Retail sales in the US were up 0.5% month-over-month in March of 2022,
  • P
    Progamblr
    at this price isn't this stock a no-brainer given its balance sheet and the dividend payout? I loaded up more and brought my cost basis down.
  • T
    Thelostclock
    Couldnt resist.. I bought and started my position.