Axiall Corp (AXLL), Lululemon Athletica inc. (LULU), Foot Locker, Inc. (NYSE:FL): 3 Firms with Unjustified Sell-offs

The forward price-to-earnings ratio at Foot Locker, Inc. (NYSE:FL) is 12.1 times, which is a $2.86 consensus earnings per share for this year. The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) is estimated at $815 million. The industry average EV/EBITDA of 6 times is relatively low for Foot Locker, Inc. (NYSE:FL) because the company’s profit margin is higher than average. If the firm grows EBITDA by 5% over the next year, the EV/EBITDA multiple likely falls to 4.8 times, representing a potential upside of 25%.

Long-term investing is the way to go

Long-term investors have a surefire advantage when owning stocks because they don’t often jump on bandwagons and sell their shares on news that will likely only have an effect in the short term. Not letting emotions get in the way can ensure that these investors make calculated decisions based on the company’s overall operating capabilities.

Axiall Corp (NYSE:AXLL), Lululemon Athletica inc. (NASDAQ:LULU) and Foot Locker, Inc. (NYSE:FL) have undergone sell-offs related to news that only affect the firms in the short term. This creates an enticing buying opportunity for investors who can see that the firms have what it takes to prosper long into the future. I always add companies that have experienced major sell-offs to my watch list, and then I investigate whether shareholders have overreacted in their decisions to sell.

The article 3 Firms with Unjustified Sell-offs originally appeared on Fool.com.

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