ANF or TPR: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Abercrombie & Fitch (ANF) and Tapestry (TPR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Abercrombie & Fitch has a Zacks Rank of #1 (Strong Buy), while Tapestry has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ANF likely has seen a stronger improvement to its earnings outlook than TPR has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ANF currently has a forward P/E ratio of 11.88, while TPR has a forward P/E of 14.49. We also note that ANF has a PEG ratio of 1.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TPR currently has a PEG ratio of 1.46.
Another notable valuation metric for ANF is its P/B ratio of 4.21. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TPR has a P/B of 33.57.
These metrics, and several others, help ANF earn a Value grade of A, while TPR has been given a Value grade of C.
ANF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ANF is likely the superior value option right now.
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See Stocks Now >>Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Tapestry, Inc. (TPR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
