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Are Investors Undervaluing Abercrombie & Fitch (ANF) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Abercrombie & Fitch (ANF - Free Report) . ANF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

We should also highlight that ANF has a P/B ratio of 2.49. 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. Over the past year, ANF's P/B has been as high as 2.66 and as low as 0.53, with a median of 1.18.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ANF has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.86.

Finally, investors should note that ANF has a P/CF ratio of 46.92. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid 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 50.22 and as low as -98.30, with a median of 24.05.

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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