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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (10873)	7/6/2000 11:14:22 PM
From: James Clarke	Read Replies (4) of 78515

You know you bought a stock right when it goes up 23% in one day on what looks like bad news. Abercrombie & Fitch reported a June same-store-sales decline of 4% today and the stock jumped 2 3/4 to 14 3/8. I bought a good deal of stock at 11 a month or so ago on the way down. Actually bought a few more shares today at 13 1/2 - I rarely average up, but this one is special. I think you're looking at a $35 stock trading at 14. This company's financials are just incredible. Very favorable cash flow dynamics. You don't find too many companies with a 20%+ growth rate that throw off free cash flow. And 99.9% of those trade at above 10x earnings. I don't think there is a single analyst with a buy on the stock - they've got to be sweating today - and it is still trading below 10x earnings, even after a 75% move off the bottom in the last couple weeks. The stock is still a screaming buy in my book, though not without some risk. I'm kicking myself for not adding at 8-9, though looking at the chart (this was a $50 stock a year ago) I'm pretty happy with an average cost below 12.

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