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Is Abercrombie & Fitch (ANF) Stock Undervalued 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Abercrombie & Fitch (ANF - Free Report) . ANF is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.98, while its industry has an average P/E of 13.05. Over the past year, ANF's Forward P/E has been as high as 15.83 and as low as 5.99, with a median of 9.26.

Another valuation metric that we should highlight is ANF's P/B ratio of 3.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. ANF's current P/B looks attractive when compared to its industry's average P/B of 5.66. ANF's P/B has been as high as 6.85 and as low as 2.50, with a median of 3.69, over the past year.

Finally, investors will want to recognize that ANF has a P/CF ratio of 6.14. 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. ANF's P/CF compares to its industry's average P/CF of 12.60. Within the past 12 months, ANF's P/CF has been as high as 13.48 and as low as 4.77, with a median of 6.76.

Value investors will likely look at more than just these metrics, but the above data helps show that Abercrombie & Fitch is likely undervalued currently. And when considering the strength of its earnings outlook, ANF sticks out as one of the market's strongest value stocks.

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