The Finish Line (NASDAQ: FINL) is
a mall-based specialty retailer, offering athletic and casual footwear and sportswear through 699 Finish Line stores in 47 states. Featured brands include Nike, Puma, Jordan, Lacoste and Adidas. The firm also sells urban street wear through 94 Man Alive outlets in 19 states. Foot Locker (NYSE: FL) and The Sports Authority are major competitors.
The firm pleased investors late last month, when it reported fiscal Q1 EPS of two cents and revenues of $287.9 million. Analysts had been looking for a loss of five cents and $281.3 million. In discussing the positive quarter, the CEO cited successful application of strategic merchandising and inventory management programs. B. Riley subsequently upgraded the shares to "buy" and Sterne Agee reiterated its "buy" call.
The stock
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the shares with three "strong buys," two "buys" and five "holds." Analysts expect a 29% growth rate, through the next year. The FINL Price to Sales ratio (0.39), Price to Book ratio (1.17) and EPS Growth rate (-0.08 to +0.02 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 64% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $1.48 and $10.01. A stop-loss of $7.60 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in either of the stocks discussed above.
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