Below is a note from CEO Keith McCullough on why we're adding Foot Locker (FL) to the short side of Investing Ideas today:
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"Looking to make some sales on green? Sure beats freaking out on Friday and selling on red! How about a newsy name this morning that Brian McGough still does not like: Foot Locker (FL)? Per Brian's early morning notes to our Institutional Research subscribers on the Finish Line (FINL) takeout: "FINL being acquired by JD Sports cracks me up. No meaningful change to the competitive landscape in the US, though we might see greater leverage against vendors – i.e. Nike. Also not a signal to me that the space has bottomed, though there’s risk to FL more so than FINL whether it bottomed or not. Mike Ashley – CEO of Sports Direct and arch enemy of JD – had been acquiring FINL shares and has built a 9.9% position – and SPD had full 35% interest. Ashley will make money on this deal, but not the way he wanted to, and without the empire-build factor. JD Sports is majority owned by Pentland 58%. Sports Direct owned an 11% stake in JD Sports, its rival in the UK, but sold it in 2016." Sell green, KM" |
