After I poked at Abercrombie & Fitch (ANF) in my article on Snapchat–using it as my example of permanent capital destruction following a period of high investor sentiment–I wanted to make sure that I wasn’t take an underserved shot at the company so I reviewed it for the first time in a few years.
Usually, when a stock falls from the $80 to $15 range and is still earnings a profit, the fair follow-up question is: “Has this stock fallen so far that it is now a value pick?”
But I don’t that type of thinking applies here.
Abercrombie is only earning between $0.70 and $0.90 per share in profits (the reason for the wide variance is because retailers are heavily reliant on end-of-year as November and December sales alone are about equal to the other ten months combined.)
It is paying out $0.80 per share in dividends. This means … Read the rest of this article!