Is Abercrombie & Fitch (ANF) Stock Undervalued 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, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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) and an A for Value. The stock is trading with P/E ratio of 10.55 right now. For comparison, its industry sports an average P/E of 15.41. 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 0.59. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ANF's PEG compares to its industry's average PEG of 0.96. 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.
Investors should also recognize that ANF has a P/B ratio of 2.59. 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 5.99. Over the past year, ANF's P/B has been as high as 3.04 and as low as 1.05, with a median of 2.24.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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 0.62. This compares to its industry's average P/S of 0.68.
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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