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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (10643)	5/24/2000 1:59:00 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78958

David, I looked at the Yahoo posts referenced by you. Both bull and bear analysis is very amateur, but I won't say mine is any better. ;-) Regarding bull case: you can't do 10 year discounting on a cyclical fashion driven business. Especially with twenty tweaked variables. I know one spreadsheet that croaks over if you input current ANF ROE, market cap and shareholder's equity (nudge, nudge Mike :-)))). It's telling that at this ROE, the annualized rate of return will be more than 40%. Forget about it - it's a starry eyed scenario. For much better bull case look at Mike's writeup at valuestocks.net Regarding bear case: Stock making new lows is not bearish. I cannot comment on management, though James Clarke here mentioned that they are trustworthy. Slipping same store sales and inventory buildup is bad, but is it bad enough? There was quite reasonable Fool writeup recently. Now we come to the crux of the matter: fashion. Are they have beens? Difficult to tell. It has happened both ways. Look at Gap. In 1995-6, I was looking at them. Everybody was saying that there is no growth, that they are losing it, etc. They have survived and flourished. But then, some other stores were not so lucky. One more thing about Gap: compare their recent report to ANF's. I may be wrong, but I don't see where ANF is worse. So I think that ANFs stock is down too much. If I was an ANF bull, I would watch two things: SSS and inventory. Plus the breakdown of their successes/losses. Only close your eyes and wait for September/October. June and July won't give any clear indications. From what I see right now, they have consistent trouble with women's line. However, the men's line and kids stores are very successful. If you have access, read sell-side analyst reports. They are better than 99% of the Yahoo drivel. This is retail, not .com and the analysts are pretty knowledgeable. Forget their ratings though. If I was patient, I would also buy it in July-August, before the back-to-school season and 4th quarter. Most likely the stock won't recover before then, though there may be some trading opportunities. Good luck Jurgis