Stock Analysis: Decent Value Stocks

Fundamental Rating

Taking everything into account, ANF scores 7 out of 10 in our fundamental rating. ANF was compared to 121 industry peers in the Specialty Retail industry. ANF gets an excellent profitability rating and is at the same time showing great financial health properties. ANF is valued quite cheap, while showing a decent growth score. This is a good combination! With these ratings, ANF could be worth investigating further for value investing!.

1. Profitability

1.1 Basic Checks

In the past year ANF was profitable.

In the past year ANF had a positive cash flow from operations.

Of the past 5 years ANF 4 years were profitable.

Of the past 5 years ANF 4 years had a positive operating cash flow.

1.2 Ratios

ANF's Return On Assets of 17.16% is amongst the best of the industry. ANF outperforms 95.04% of its industry peers.

ANF's Return On Equity of 42.39% is amongst the best of the industry. ANF outperforms 91.74% of its industry peers.

ANF has a Return On Invested Capital of 24.92%. This is amongst the best in the industry. ANF outperforms 91.74% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for ANF is above the industry average of 13.04%.

The last Return On Invested Capital (24.92%) for ANF is above the 3 year average (15.61%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	17.16%
ROE	42.39%
ROIC	24.92%

ROA(3y)9.43%

ROA(5y)6.76%

ROE(3y)24.83%

ROE(5y)18.83%

ROIC(3y)15.61%

ROIC(5y)12.26%

1.3 Margins

The Profit Margin of ANF (11.44%) is better than 93.39% of its industry peers.

ANF's Profit Margin has improved in the last couple of years.

With an excellent Operating Margin value of 15.20%, ANF belongs to the best of the industry, outperforming 92.56% of the companies in the same industry.

In the last couple of years the Operating Margin of ANF has grown nicely.

ANF's Gross Margin of 64.15% is amongst the best of the industry. ANF outperforms 92.56% of its industry peers.

ANF's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	15.2%
PM (TTM)	11.44%
GM	64.15%

OM growth 3Y16.83%

OM growth 5Y32.13%

PM growth 3Y17.33%

PM growth 5Y60.11%

GM growth 3Y1%

GM growth 5Y1.56%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ANF has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.

ANF has less shares outstanding than it did 1 year ago.

ANF has less shares outstanding than it did 5 years ago.

ANF has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

ANF has an Altman-Z score of 4.87. This indicates that ANF is financially healthy and has little risk of bankruptcy at the moment.

ANF has a better Altman-Z score (4.87) than 88.43% of its industry peers.

There is no outstanding debt for ANF. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	4.87

ROIC/WACC2.63

WACC9.47%

2.3 Liquidity

ANF has a Current Ratio of 1.48. This is a normal value and indicates that ANF is financially healthy and should not expect problems in meeting its short term obligations.

ANF has a Current ratio (1.48) which is in line with its industry peers.

ANF has a Quick Ratio of 1.48. This is a bad value and indicates that ANF is not financially healthy enough and could expect problems in meeting its short term obligations.

Looking at the Quick ratio, with a value of 0.97, ANF is in the better half of the industry, outperforming 72.73% of the companies in the same industry.

ANF does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.48
Quick Ratio	0.97

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 70.27% over the past year.

Measured over the past years, ANF shows a very strong growth in Earnings Per Share. The EPS has been growing by 69.30% on average per year.

The Revenue has grown by 15.60% in the past year. This is quite good.

The Revenue has been growing slightly by 6.43% on average over the past years.

EPS 1Y (TTM)70.27%

EPS 3Y34.82%

EPS 5Y69.3%

EPS Q2Q%20.2%

Revenue 1Y (TTM)15.6%

Revenue growth 3Y10.05%

Revenue growth 5Y6.43%

Sales Q2Q%9.09%

3.2 Future

Based on estimates for the next years, ANF will show a decrease in Earnings Per Share. The EPS will decrease by -3.71% on average per year.

ANF is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.45% yearly.

EPS Next Y1.96%

EPS Next 2Y1.44%

EPS Next 3Y-3.71%

EPS Next 5YN/A

Revenue Next Year3.83%

Revenue Next 2Y3.35%

Revenue Next 3Y2.45%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 7.30, the valuation of ANF can be described as very cheap.

Based on the Price/Earnings ratio, ANF is valued cheaper than 90.91% of the companies in the same industry.

ANF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.83.

A Price/Forward Earnings ratio of 7.16 indicates a rather cheap valuation of ANF.

Based on the Price/Forward Earnings ratio, ANF is valued cheaper than 91.74% of the companies in the same industry.

When comparing the Price/Forward Earnings ratio of ANF to the average of the S&P500 Index (20.94), we can say ANF is valued rather cheaply.

		Industry Rank	Sector Rank
PE	7.3
Fwd PE	7.16

4.2 Price Multiples

ANF's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ANF is cheaper than 95.04% of the companies in the same industry.

Compared to the rest of the industry, the Price/Free Cash Flow ratio of ANF indicates a rather cheap valuation: ANF is cheaper than 88.43% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	7.06
EV/EBITDA	2.74

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ANF does not grow enough to justify the current Price/Earnings ratio.

The excellent profitability rating of ANF may justify a higher PE ratio.

ANF's earnings are expected to decrease with -3.71% in the coming years. This may justify a cheaper valuation.

PEG (NY)3.73

PEG (5Y)0.11

EPS Next 2Y1.44%

EPS Next 3Y-3.71%