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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. Nevertheless, we are always paying attention to...

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This story originally appeared on Zacks

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.

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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Abercrombie & Fitch (ANF) is a stock many investors are watching right now. 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 10.09 right now. For comparison, its industry sports an average P/E of 14.56. Over the last 12 months, 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.

Investors will also notice that ANF has a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ANF's industry currently sports an average PEG of 0.80. 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 notable valuation metric for ANF is its P/B ratio of 2.46. 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 5.25. ANF's P/B has been as high as 3.04 and as low as 1.05, with a median of 2.28, over the past year.

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 0.64. This compares to its industry's average P/S of 0.7.

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.



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