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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.

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

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Abercrombie & Fitch (ANF - Free Report) . ANF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 13.55, which compares to its industry's average of 17.28. Over the last 12 months, ANF's Forward P/E has been as high as 24.20 and as low as 12.39, with a median of 16.22.

Finally, investors will want to recognize that ANF has a P/CF ratio of 11.51. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.08. Over the past 52 weeks, ANF's P/CF has been as high as 18.04 and as low as 9.21, with a median of 13.30.

Investors could also keep in mind The Gap (GAP - Free Report) , an Retail - Apparel and Shoes stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of The Gap are currently trading at a forward earnings multiple of 11.19 and a PEG ratio of 1.20 compared to its industry's P/E and PEG ratios of 17.28 and 1.50, respectively.

GAP's price-to-earnings ratio has been as high as 22.71 and as low as 9.98, with a median of 15.85, while its PEG ratio has been as high as 4.60 and as low as 1.07, with a median of 1.42, all within the past year.

The Gap also has a P/B ratio of 2.86 compared to its industry's price-to-book ratio of 4.71. Over the past year, its P/B ratio has been as high as 4.07, as low as 1.63, with a median of 2.99.

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


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