Yahoo Finance Are Investors Undervaluing Foot Locker (FL) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Foot Locker (FL). FL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.37 right now. For comparison, its industry sports an average P/E of 16.39. Over the past year, FL's Forward P/E has been as high as 10.55 and as low as 4.75, with a median of 7.21.
Another valuation metric that we should highlight is FL's P/B ratio of 1.31. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.35. Over the past 12 months, FL's P/B has been as high as 1.39 and as low as 0.71, with a median of 0.94.
Finally, investors will want to recognize that FL has a P/CF ratio of 6.77. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. FL's current P/CF looks attractive when compared to its industry's average P/CF of 8.74. Within the past 12 months, FL's P/CF has been as high as 6.91 and as low as 2.28, with a median of 4.09.
If you're looking for another solid Retail - Apparel and Shoes value stock, take a look at Urban Outfitters (URBN). URBN is a # 2 (Buy) stock with a Value score of A.
Urban Outfitters is trading at a forward earnings multiple of 12.47 at the moment, with a PEG ratio of 0.69. This compares to its industry's average P/E of 16.39 and average PEG ratio of 1.03.
Over the past year, URBN's P/E has been as high as 16.59, as low as 5.92, with a median of 9.56; its PEG ratio has been as high as 0.92, as low as 0.33, with a median of 0.22 during the same time period.
Additionally, Urban Outfitters has a P/B ratio of 1.51 while its industry's price-to-book ratio sits at 3.35. For URBN, this valuation metric has been as high as 1.68, as low as 1.01, with a median of 1.28 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Foot Locker and Urban Outfitters are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FL and URBN feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Foot Locker, Inc. (FL) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
