Abercrombie & Fitch (ANF) Stock Finally Reaches Floor of $20
NEW YORK (TheStreet) -- Shares of Abercrombie & Fitch (ANF) - Get Report have suffered through a long decline, but prices look like they are finally bottoming out, for this brand.
In this chart of ANF, above, we can see a price low in March with heavy volume. After this March low, the On-Balance-Volume line (OBV) starts to rise, indicating accumulation -- with more volume traded on days when ANF closed higher. Since March, the price of ANF crisscrosses the 50-day Simple Moving Average. ANF is now above the 50-day average and the slope of the average is positive. The $20 level now looks like a floor for an advance.
In this longer view of ANF, above, we can see the decline to nearly $15 from $55. The recent rally above the 40-week moving average and the improvement in the OBV line fit into a bottom pattern. The Moving Average Convergence Divergence (MACD) oscillator had a positive crossover and could soon cross the zero line. Traders could nibble on the long side of ANF, here, and add on strength above $24. Sell stops should be below $20.
TheStreet Ratings team rates ABERCROMBIE & FITCH as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ABERCROMBIE & FITCH (ANF) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 361.92% to $73.03 million when compared to the same quarter last year. In addition, ABERCROMBIE & FITCH has also vastly surpassed the industry average cash flow growth rate of -10.88%.
- The gross profit margin for ABERCROMBIE & FITCH is rather high; currently it is at 69.08%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.09% trails the industry average.
- ANF's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 106.3% when compared to the same quarter one year ago, falling from $12.88 million to -$0.81 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market, ABERCROMBIE & FITCH's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ANF
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.