Taking Some Profit In Abercrombie

April 20, 2018 By Sophocles Sophocleous

I’ve been interested in Abercrombie & Fitch (ANF) since it appeared as a potential investment in my value model. In 2015, I made a quick profit of around 25% and over the last year, I’ve repositioned myself as the stock dropped below intrinsic value and went to a full position at $12. I had thought that American Eagle could have purchased the company but in a surprise move, ANF decided to go alone and it paid off for shareholders.

The company made a great comeback with sales growing for the first time (+5%) in years and operating margins rising 265 bps yoy. The turnaround in comparable sales was remarkable as the company registered the best improvement in the industry with a 14% change! Of course, the market took notice and the stock rallied from a low of $9 in July 2017 to $29 a few days ago.

Currently, the stock looks fairly valued and I decided to take some profits. Regarding my views and valuation of ANF please see the piece I wrote on Seeking Alpha by clicking here.

fatalpha.com is not operated by a broker, a dealer, a registered investment adviser, or a regulated entity. Under no circumstances does any information posted represent a recommendation to buy or sell a security. In no event shall fatalpha.com, Sophocles Sophocleous, FATALPHA LTD, or any affiliates or associates be liable to any member or guest for any damages of any kind arising out of the use of any content available on the website. Past performance is a poor indicator of future performance. All the information on this site and any related materials is not intended to be, nor does it constitute investment advice or recommendations. All materials and information you obtain here are exclusively for informational purposes and does not constitute an offer or solicitation to provide any investment services to investors based in the U.S. or elsewhere.

fatalpha.com is not operated by a broker, a dealer, a registered investment adviser, or a regulated entity. Under no circumstances does any information posted represent a recommendation to buy or sell a security. In no event shall fatalpha.com, Sophocles Sophocleous, FATALPHA LTD, or any affiliates or associates be liable to any member or guest for any damages of any kind arising out of the use of any content available on the website. Past performance is a poor indicator of future performance. All the information on this site and any related materials is not intended to be, nor does it constitute investment advice or recommendations. All materials and information you obtain here are exclusively for informational purposes and does not constitute an offer or solicitation to provide any investment services to investors based in the U.S. or elsewhere.