2 Hot Growth Stocks to Buy This Month

NYSE: FL | Foot Locker, Inc. News, Ratings, and Charts

FL – Due to less concern over inflation and lower treasury yields, growth stocks are once again outperforming their value counterparts. Foot Locker (FL) and Signet Jewelers (SIG) are two growth stocks poised to see their shares rise in the weeks ahead. Read more to learn why.

Growth stocks, which took a back seat to their value counterparts from January through May of this year, have been bouncing back in the past month. For example, the S&P SPDR 500 Growth ETF (SPYG) is up 5% in the past month, compared to a 2% loss for the S&P SPDR 500 Value ETF (SPYV). I believe the main driver of this performance is less concern over inflation and lower treasury yields.

Treasury yields had been rising over the past couple of months due to concerns over inflation. Inflation is considered a negative to growth stocks as it discounts a growth stock’s present value. But investors have since changed their tune and now view inflation as transitory. This has led to lower treasury yields and higher stock prices for growth stocks. While the Fed just announced plans to raise rates in 2023, there’s still plenty of time to generate strong returns in growth stocks if you know where to look.  

I like to focus on four components of our proprietary POWR Ratings system when looking for top growth stocks. I want a stock with a Strong Buy rating that also has a grade of A for Growth Grade, Value Grade, and a Momentum Grade. I call these the four aces. These are highly rated stocks based on 118 different factors and exhibit strong growth characteristics. Plus, they’re undervalued and trading in an uptrend, making it the perfect time to buy. Foot Locker, Inc. (FL) and Signet Jewelers (SIG) certainly fit the bill.

Foot Locker, Inc. (FL

FL is one company that has been on a tear over the past year. The stock is up 117% since August 18th. The company sells athletically inspired shoes and apparel. It operates thousands of retail stores throughout the United States, Canada, Europe, Australia, and New Zealand. Store names include Foot Locker, Champs, and Runners Point. FL also has an e-commerce business where it sells merchandise through Footlocker.com, Eastbay, and Final-Score.

The company has been investing in expanding its digital presence by growing its e-commerce platform and direct-to-consumer operations. For instance, it activated a Shop My Store feature on its website and added Apple Pay and Google Pay as digital payment options. This has paid off in the first quarter as its direct-to-consumer segment generated 44.2% in sales growth.

FL is also aiming to grow through its kids’ and women’s businesses and grow internationally. For example, the company has seen strong growth in the Asia Pacific region. FL has an overall grade of A, which translates into a Strong Buy rating in our POWR Ratings system. In addition, the company has a Growth Grade of A, driven by earnings and EBITDA growth of over 100% in the past year.

Earnings are forecasted to rise 40.8% in the current quarter. FL also has a Momentum Grade of A due to its performance in the last year. The company also has a Value Grade of A, which isn’t surprising, as it has a trailing P/E of 10.32 and a forward P/E of 12.80. The stock has pulled back a little over the past week, making it an excellent opportunity to buy on the dip.

We also provide Stability, Sentiment, and Quality Grades for FL, which you can find here. In addition, FL is ranked #1 in the A-rated Athletics & Recreation industry. For more top stocks in this industry, click here.  

Click here to check out our Retail Industry Report for 2021

Signet Jewelers (SIG)

Much like FL, SIG has seen huge share gains over the past year. The company is a retailer of diamond jewelry. Its merchandise mix includes bridal, fashion, watches, and others. The bridal category includes engagement, wedding and anniversary purchases. Its North America segment consists of the legacy Sterling Jewelers and Zale units. U.S. stores operate nationally in malls and off-mall locations like Kay, Jared, Zales, and Piercing Pagoda. 

The company has benefited from government stimulus, tax refunds, and consumer enthusiasm driven by the vaccine. SIG has also been expanding its online shopping experience as part of its Signet Path to Brilliance Plan. For instance, in the fourth quarter, e-commerce sales soared 70.5% year over year. The company has introduced tools like conversational messaging, improved text search, and virtual try-on and added new search browse and checkout features.

SIG also bought Rocksbox, a jewelry rental subscription service, which is expected to expedite the company’s online offerings. To drive future growth, management will be utilizing data-driven insights to target new and existing customers. The company has also been optimizing its store footprint. It has shuttered more than a fifth of its locations over the past three years while opening and repositioning stores in more profitable locations.

SIG has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system. Like FL, the company has a Growth Grade of A, a Value Grade of A, and a Momentum Grade of A. In terms of growth, SIG’s EBITDA surged 1,294.8% over the past year. Plus, analysts expect earnings to soar 243% this quarter. From a valuation standpoint, the stock is also relatively undervalued with a forward P/E of 14.71.

To access the rest of SIG’s grades (Stability, Sentiment, and Quality), click here. In addition, SIG is ranked #4 in the A-rated Fashion & Luxury industry. For other top stocks in this industry, click here.

Discover Today’s Best Value Stocks

This article was written by David Cohne, Chief Value Strategist for StockNews.com.  David has helped investors find the most profitable stocks for over 20 years

If you would like to see more of his best value stock ideas, then click the link below.

See David Cohne’s Favorite Value Stocks


FL shares rose $0.25 (+0.44%) in premarket trading Monday. Year-to-date, FL has gained 43.14%, versus a 11.81% rise in the benchmark S&P 500 index during the same period.


About the Author: David Cohne


David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
FLGet RatingGet RatingGet Rating
SIGGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Top 4 Tech Giants Poised for Explosive Growth

Fueled by the ever-growing demand for advanced technological solutions across various sectors and ongoing innovation, the tech industry has robust growth prospects. Thus, it could be wise to invest in top tech stocks Dropbox (DBX), TTM Technologies (TTMI), Lantronix (LTRX) and AstroNova (ALOT) for potential growth. Continue reading…

3 Top Rated Software Stocks to Streamline Your Investments

The software industry is thriving with soaring demand, presenting ample investment opportunities. So, fundamentally solid software stocks ServiceNow (NOW), Autodesk (ADSK), and Docebo (DCBO) might be ideal buys for promising returns. Read on...

Biotech Investors: Should You Buy, Hold, or Sell Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR)?

Despite facing several challenges, the biotech sector thrives due to growing demand for effective treatments, consistent innovations, and a sustained demand for high-quality drugs and therapies. Let's assess whether one should Buy, Hold, or Sell biotech stocks Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR). Keep reading...

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Foot Locker, Inc. (FL) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All FL News