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Subject: Who thinks ANF is overvalued at $67?

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Harvey Kimsey

12/06/2006 6:59 PM
I think it is a buy at these prices. Nice correction lately. Will it keep putting up great numbers? regards

Joe Craig
Ellicott City, MD
StockCentral Administrator

12/06/2006 8:28 PM
I don't follow Abercrombie & Fitch, so I cranked up Take Stock to see what it has to say. For quality, TS rates ANF as 6.8 out of 10. That makes it "green" for quality. TS's buy below price is $64.34, so it's now wildly overpriced by that standard. I also see that the "mood" indicator is down, meaning that the current P/E of 16ish is low compared to the high P/E over the last several years. The low P/Es tend to bottom out around 10 or 11, and has been as low as 12 in the last year. So ... good company by TS standards, a tad overpriced, but with a P/E in the normal range. If you're patient, maybe it will correct itself a bit more ...

Joe

Nick Caccavo

05/10/2007 3:18 PM
ANF has been a strong company relative to its competition (American Eagle AEO and Aeropastale ARO) for at least the last 8 years. It has an extremely well established brand name that sells itself (how else can one explain the fact that they are able to sell ripped clothing that is spattered with paint?). Because they have established themselves as not only a clothing store, but a trend-setter, they are able to charge higher prices for their product line. Consequently, ANF has much higher profit margins than American Eagle, although I am not sure how they do profit-wise against Aeropastale.

armin fields

05/11/2007 5:57 PM
Nick Caccavo wrote: << how else can one explain the fact that they are able to sell ripped clothing that is spattered with paint?>> Hi Nick: I also saw those tattered jeans, but they were not for sale and were clearly marked inside the store. It was just a marketing ploy to create buzz, I think. Reuters and MSN offer an easy way to evaluate profit margins. Comparing ANF, AEO and ARO in terms of the 5 yr average Pre-Tax Profit Margin (PTPM), ANF is best among the three and substantially higher than its industry average. ARO was a dismal third, around 12.20% at both Reuters and MSN compared to ANF's ~19.50%. Value Line's 5-11 report says that ANF just opened its first store in Europe (in London) and "that international expansion will be a key earnings catalyst over the long term." My SSG shows that ANF's price was $81.26 yesterday (not $67) and that it was overvalued as was AEO and ARO. For ANF, I can only satisfy the SSG Buy criteria by projecting a Forecast High Price in the next 5 years of $196.60, or some $42/sh or 27% higher than the high end of VL's $105-155 estimate. Too rich for me. Armin Fields

Armin Fields check out my SSG blog at http://stock-analysis-with-ssg-and-pert-a.blogspot.com

Rajiv Roy

05/13/2007 10:39 PM
Having to buy clothes for two teenagers, ANF has definitely over-priced clothes if not overvalued stocks. :) I have found the discount store at the Mall of America in Minneapolis for Aeropostale and ANF and head straight to the back for the clearance. FWIW, purely fashion wise, ANF is slightly out of favor compared to Holister or Aeropostale or at least that is what I have gathered. But back to the topic at hand. - I used EPS GR of 13.36 = Mean of 15.71 - 2.35 (Std. dev of estimates) (Armin's technique) - High PE of 20.3, not unreasonable given current PE is 18.39. - Low price of 37.12. Despite current price of 80 and change. My way of managing risk for retail business that I do not understand. Here is the link to the SSG http://www.stockfundas.com/main.aspx?subPage=analysis&fromUserId=3&ticker=ANF

Rajiv www.stockfundas.com

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Forums > Stocks with tickers beginning A-D > ANF > Who thinks ANF is overvalued at $67?