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Strategies & Market Trends : Value Investing
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From: Paul Senior11/15/2006 12:49:40 PM
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I'll up my few shares of clothing retailer Abercrombie just a little now.

(Sigh), Jim Clarke would shake his head in some dismay..."NOW you want to add? You should have added much lower when it was a real value stock", I can imagine him saying.

I just cannot resist the relatively low forward p/e.

On the plus side, ANF is a powerhouse with a great balance sheet. It has reported good earnings (imo), and trades at a forward 14x multiple when other clothing retailers are closer to 20x. It MAYBE appeals to a somewhat broader group than teens.

OTOH, it's basically teens/twenties imo, and we're going into a recession/slowdown maybe, so disposable income may be tight. (OTOH, kids always seem to have money for "stuff" (like clothes).) To base a stock purchase on RELATIVE p/e multiples (one company compared to another in a sector) is EXTREMELY dangerous. More so in this business which is fashion and fickle.

For a few shares though, I'll risk it.

finance.yahoo.com
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