Abercrombie & Fitch (ANF)

(A Top Pick Jan 18/22, Down 18.5%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with ANF has triggered its stop at $27.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 23%, when combined with our previous buy recommendation.

Stockchase Research Editor: Michael O'Reilly Leveraging off its online marketing efforts and optimizing operations, ANF continues to perform well and is again reiterated as a TOP PICK. Despite supply chain issues, management's strategy to rationalize store base is offsetting rising costs. Recently reported earnings beat analyst expectations by 30% and it is managing a ROE of 32%. We like that it has been building cash holdings, while paying off debt and buying back stock. We continue to recommend a stop loss at $27.50, looking to achieve $45.50 -- upside potential over 30%. Yield 0% (Analysts’ price target is $45.57)

Stockchase Research Editor: Michael O'Reilly We reiterate ANF as a TOP PICK. It trades at just under 3x book value and has a PEG ratio under 1.0. It has been building cash holdings, while paying off debt and buying back stock. We would buy this with a stop loss at $27.50, looking to achieve $53 -- upside potential over 37%. Yield 0% (Analysts’ price target is $52.78)

Stockchase Research Editor: Michael O'Reilly ANF grew revenue by 24% over the year, with online sales accounting for almost half -- all while expanding margins. As the pandemic winds down and supply chain certainty returns, there is good upside with this. It trades at 8x earnings compared to peers at 21x. It trades at just under 2.2x book value and has a PEG ratio under 1.0. It has been building cash holdings, while paying off debt and buying back stock. We would buy this with a stop loss at $27.50, looking to achieve $53 -- upside potential over 47%. Yield 0% (Analysts’ price target is $52.63)