The Talbots Inc (TLB), Foot Locker Inc (FL), and Nordstrom Inc (JWN) are Apparel Stores Worth a Serious Look

The Talbots Inc (NYSE: TLB), Foot Locker Inc (NYSE: FL), and Nordstrom Inc (NYSE: JWN) are in the summer “Clothing Cycle” and wholesalers and retailers, despite the current lackluster market, are looking forward to strong sales.

The small cap in this group, $313.9 million, is The Talbots Inc which is currently trading in the $4.59 range. This Company is the one mentioned in the sub-header as “Drifting Down” and that it has… The stock was trading in the $11.50 range six months ago and has drifted down to its current price with a few sharp dips. It has lost 60% since December. That’s a big ‘Buy on the Dips’ signal for bargain hunters to investigate. The Company runs 580 stores catering to women.

The mid-sized company in this group at $3.69 billion is Foot Locker which is currently trading in the $23.82 range. The stock has staged a strong, textbook run up in the last four months, traveling from $18 to $25, a gain of 38.88%, before the current mini correction. Virtually no short sellers and positive sales and EPS projections for the next quarter are also big “Signals.” Foot Locker has approximately 3,500 stores. 

The biggest stock in this group, with a market cap of $9.7 billion is Nordstrom Inc which is currently trading in the $43.96 range. The stock has gained 4.6% in six months. It topped $47 in May. The Department Store chain has approximately 207 stores. It too has virtually no short sellers and positive sales and EPS projections for the next quarter.

All three apparel plays in this group, The Talbots Inc (NYSE: TLB), Foot Locker Inc (NYSE: FL), and Nordstrom Inc (NYSE: JWN) are keyed up for summer sales and no doubt they are all planning retail discounts to push sales.

I don't think the Foot Locker run up is over yet and once the bears have had their way this month, the stock will continue its ascent. I like the $4.59 entry level price of The Talbots. As for Nordstrom Inc, its ascent has been weak in the last six months and a poor summer performance could hold the stock at its current valuation.