Are Investors Undervaluing Abercrombie & Fitch (ANF) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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). ANF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.39. This compares to its industry's average Forward P/E of 17.46. ANF's Forward P/E has been as high as 2,563.38 and as low as -15,169.99, with a median of 23.48, all within the past year.
Investors will also notice that ANF has a PEG ratio of 0.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ANF's industry currently sports an average PEG of 1.48. ANF's PEG has been as high as 142.41 and as low as -842.78, with a median of 1.30, all within the past year.
Another valuation metric that we should highlight is ANF's P/B ratio of 2.31. The P/B ratio pits a stock's market value against 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 6.51. Within the past 52 weeks, ANF's P/B has been as high as 3.04 and as low as 0.82, with a median of 1.78.
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 0.64. This compares to its industry's average P/S of 0.82.
These are just a handful of the figures considered in Abercrombie & Fitch's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ANF is an impressive value stock right now.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Abercrombie & Fitch Company (ANF): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research