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Should Value Investors Buy Abercrombie & Fitch (ANF) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Abercrombie & Fitch (ANF - Free Report) is a stock many investors are watching right now. ANF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.01 right now. For comparison, its industry sports an average P/E of 15.91. Over the past 52 weeks, ANF's Forward P/E has been as high as 24.20 and as low as 12.68, with a median of 16.21.

Finally, our model also underscores that ANF has a P/CF ratio of 11.26. 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 current P/CF looks attractive when compared to its industry's average P/CF of 12.82. Over the past 52 weeks, ANF's P/CF has been as high as 18.04 and as low as 10.69, with a median of 13.34.

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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