In this article, we discuss the 5 best sporting goods stocks to invest in. If you want to see more stocks in this selection and get insight into the market, click 10 Best Sporting Goods Stocks To Invest In.
05. Foot Locker, Inc. (NYSE:FL)
Number of Hedge Fund Holders as of Q2, 2022: 28
Foot Locker, Inc. (NYSE:FL) is a leading athletic apparel and premium footwear retailer. Foot Locker, Inc. (NYSE:FL) trades at bargain levels and offers an attractive dividend yield. As of October 24, the stock has a trailing twelve-month PE ratio of 5.04 and is offering a forward dividend yield of 5.04%. Foot Locker, Inc. (NYSE:FL) is one of the best sporting goods stocks to invest in right now.
Wall Street analysts see material upside to Foot Locker, Inc. (NYSE:FL). This August, UBS analyst Jay Sole raised his price target on Foot Locker, Inc. (NYSE:FL) to $39 from $29 and reiterated a Neutral rating on the shares. On August 23, Credit Suisse analyst Michael Binetti raised his price target on Foot Locker, Inc. (NYSE:FL) to $40 from $31 and kept a Neutral rating on the shares.
Hedge funds seem bullish on the stock. At the close of the second quarter of 2022, 28 hedge funds held stakes in Foot Locker, Inc. (NYSE:FL). The total value of these stakes amounted to $228.99 million. This is compared to 21 hedge funds in the preceding quarter with stakes worth $177.09 million. As of June 30, Balyasny Asset Management is the top shareholder in Foot Locker, Inc. (NYSE:FL) and has stakes worth $55.96 million in the company. Ken Griffin, Cliff Asness, and Israel Englander were some of the company’s major stakeholders in Q2.
Here is what Miller Value Partners had to say about Foot Locker, Inc. (NYSE:FL) in its first-quarter 2022 investor letter:
“Finally, Foot Locker (NYSE:FL) came under significant pressure during the quarter, with the stock down more than 50% from its highs and valuation not far from early 2020 lows. Nike continues to place a greater focus on their Direct-to-Consumer business, which will decrease their contribution to Foot Locker’s total sales, retreating to historical averages of 50% by 2023. While a near-term headwind to sales, management plans to offset the lost business by expanding distribution to other leading brands, rolling out larger neighborhood free-standing stores, and expanding two new growth banners (WSS & Atmos). WSS stores will provide an off-mall presence and focus on the rapidly growing and underserved Hispanic market. Atmos will provide Foot Locker with the ability to expand into Japan and Asia sneaker market with their digitally led business model. These new growth concepts have a combined potential to add more than $1B in sales by 2024. The company’s balance sheet remains very strong with $800M in cash and management is increasing returns to shareholders through raising the dividend by 40% and announcing a $1.2B share buyback (more than 40% of the float at current share prices). With the next 12 to 18 months as a transition period for the company, the share price weakness provides attractive reward/risk investment potential, near 3x Enterprise Value/Earnings Before Income, Taxes, Depreciation, and Amortization (EV/EBITDA) and close to a 30% normalized free cash flow yield.”
