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Is Abercrombie & Fitch (ANF) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Abercrombie & Fitch (ANF - Free Report) . ANF is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

We should also highlight that ANF has a P/B ratio of 2.02. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.89. Within the past 52 weeks, ANF's P/B has been as high as 2.07 and as low as 0.47, with a median of 1.03.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ANF has a P/S ratio of 0.59. This compares to its industry's average P/S of 0.73.

Finally, our model also underscores that ANF has a P/CF ratio of 28.39. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ANF's current P/CF looks attractive when compared to its industry's average P/CF of 57.11. Over the past 52 weeks, ANF's P/CF has been as high as 41.39 and as low as -98.30, with a median of 20.75.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Abercrombie & Fitch is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ANF feels like a great value stock at the moment.


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