ANF - Abercrombie & Fitch
Abercromibie & Fitch, a speciality retailer that sells causal apparel, has a total of 4 brands, and each target a defined customer base varied by age (14 to 35), and location (west to east coast).
It successfully rolled out 2 new brands (Hollister in 2000, Ruchl in 2004), and maintains an average 20% revenue growth in the last 6 years. In conjuction with the high growth, it maintains an operating margin at around 19%. It has over 450million cash, with neglectable debt. Furthermore, in 2005, the company spent $103 million to repurchase the stock, and spent $52 million to pay the dividend.
A&F has one of hottest casual apprael brands in US. Its 4 brands - A&F, abercrombie, Hollister and Ruchl, each successfully targets a different age and culture(between east and west coast) group. Its ROE, operating margin, 5-year growth rate are all very competitive (ranked above average) within Apparel sector, however, as closed at 58.43 on 4/21, its P/E is at 16, lower than average with the sector. (comparsion made among AEOS, GPS, LTD, CHS).
The stock is currently priced as if there is no future earning growth. I don't see the rationale behind, especially to such a stock that had proven growth history, and still maintains a strong collection of brand portfolios. I will include this stock in my portfolio, and set 6-month target price at $70, 20% premium to current price.
You may also find this article that discussed same stock helpful.
It successfully rolled out 2 new brands (Hollister in 2000, Ruchl in 2004), and maintains an average 20% revenue growth in the last 6 years. In conjuction with the high growth, it maintains an operating margin at around 19%. It has over 450million cash, with neglectable debt. Furthermore, in 2005, the company spent $103 million to repurchase the stock, and spent $52 million to pay the dividend.
A&F has one of hottest casual apprael brands in US. Its 4 brands - A&F, abercrombie, Hollister and Ruchl, each successfully targets a different age and culture(between east and west coast) group. Its ROE, operating margin, 5-year growth rate are all very competitive (ranked above average) within Apparel sector, however, as closed at 58.43 on 4/21, its P/E is at 16, lower than average with the sector. (comparsion made among AEOS, GPS, LTD, CHS).
The stock is currently priced as if there is no future earning growth. I don't see the rationale behind, especially to such a stock that had proven growth history, and still maintains a strong collection of brand portfolios. I will include this stock in my portfolio, and set 6-month target price at $70, 20% premium to current price.
You may also find this article that discussed same stock helpful.
posted by Siyu LI at
11:11 PM
3 Comments:
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By
AA, at April 28, 2006 8:47 PM
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By
Siyu LI, at April 29, 2006 10:14 PM
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