Agus Ika Putra

A simple thesis to get a top clothing brand anf

Abercrombie fitch(Anf)Is an apparel and lifestyle brand operating mainly in the world, with broadening branches and stores in both europe and china.The company has a strong portfolio of more successful brands.

Such things as anf has recently hired goldman sachs as an advisor, immediately preceding pressure from activist investor relational capital, is positive for the shares after not too long of disappointing results.If Polo Ralph Lauren Outlet UK anf were to be bought out in a lbo at the mean enterprise value/ltm ebitda multiple of the last four relevant operation in the space, sega’s 0.975x, It would imply a stock price of $53.

I am good of anf recent product launches.The company has been development yoga apparel and shifting Ralph Lauren Polo Shirts UK its focus from tops to more denim products.These changes could help the particular organization gain shares from competitors like the american eagle(Aeo), ralph lauren(Rl)And also the gap(Of the).Working under brands of hollister, gilly hicks, abercrombie toddler, in addition abercrombie and moreover fitch, a beforehand has 1, 045 stores operating in the united states, china, and european.

I find worth it to read the international expansion strategy that anf is pursuing.In european countries, their key area of international expansion still moves forward as anf reported a solid revenue growth of 85%.Hollister brand continues to report strong sales as it covers two thirds of the business’s business in the continent.Group is also expanding in aisa.A is create its third mall based store in china, as chinese customers learn to familiarize themselves with them of the company.Abercrombie plans to open five abercrombie fitch stores in flagship countries including hamburg, hong kong, munich, dublin and amsterdam in addition to being an abercrombie kids store in london.Plus, the company plans to open about 40 unusual hollister stores in fiscal 2012.

Abercrombie does not simply go face to face against its closest competitor, the yank eagle.Its completely issue except expenses chain, hollister, offers of which are of the same level of pricing with aeo.This makes other sellers more like aeo vs.Hollister in lieu of aeo vs.A abercrombie yields internal allies, regarding its four separate chains, to prevent cost cutting just to meet up with competitors, and above all, to boost its revenues and net gain.When confronted with economic challenges, where teenagers are becoming less active shoppers, abercrombie has updated its business and i expect that investors will appreciate those results in the coming quarters.Chain stores and accelerating growth at its abercrombie kids and hollister store concepts.

Relating to valuation, anf trades the vivaz a 0.6x P/S plenty of and1.41x P/BV in comparison with peers Urban Outfitters(Urbn)4.89x P/S while 2.10x P/BV and think(Ges)1.85x P/BV additionally 0.77x P/S.This is a clear indication that anf shares are cheap and the market has unhealthy expectations of future outperformance.The stock is also a new technical bottom in the range of $30/$35.I would consider a very negative signal if anf shares break the amount of $30 and go lower with above than average volume.As detailed in your blog warren trades, i think it is important to combine fundamentals and technicals for a better investment process.

Next, it is necessary to highlight that anf has a very healthy and nearly debt free balance sheet with cash and cash equivalents of $321.6 million and permanent debt of only $65.7 million on the end of the first quarter of fiscal 2012.This brings pliability to drive future growth.

In summary, i think that anf shares are cheap and i will buy them as soon as my technical analysis points to evidence that institutional buyers are silently accumulating shares at the current prices.I will never buy any stock based on fundamentals only so my plan with anf is waiting for a price amalgamation and buy as soon as there is strong buying volume and shares start overperforming the general market.

Aid:Abercrombie fitch:A simple thesis to purchase a top clothing brand

Disclosure:I have no holdings in any stocks mentioned, but may initiate a long position in anf over another 72 hours.I wrote this myself, and it discloses my own opinions.I am not receiving pay for it(As apposed to from seeking alpha).I have no business model with any company whose stock is mentioned in this article. (Much a lot far additional. )