ORCL Pays Us 1907%! The Haberdasher Has No Clothes! (ANF, ORCL)

It’s all about Abercrombie & Fitch (NYSE:ANF) today, the company that’s been clothing the whole family since 1892.

The trade is absolutely SHAZAM, with a potential 1150% in the offing and some classic threads to boot.

But more on that in a second.

First, we have one to close.

It’s our ORCL trade, whose full details can be found HERE.

You’ll recall that we’re currently holding a $3.86 credit and one, short December 130 CALL.

And…?

The CALL can be repurchased today for $1.00, and we’re advising you do so.

Get it done and you close with NET $2.86 on NADA spent.

Adjusted for minimal commissions, gives you a win of 1907%!

And ain’t that nice…

And now, we turn to ANF.

The company has far outperformed its rivals YTD, and we have to shake our heads as to why.

WHY?

For no good reason, is the answer.

Yes, she’s announced consistent earnings beats for some time now, but the rise in stock price is wholly out of proportion to the numbers being posted.

Consider the current fundamentals—

• P/E is 25.49, but analysts foresee a contraction to just 11.98 a year from now.  That looks like a cut in half, to us, for the stock.
• ANF offers NO Annual Yield.
• Price to Book is 3.42.
• And on the earnings front, EPS are DOWN this year by 98.70%!
• Moreover, EPS for the last FIVE years are DOWN by 32.70% per year!
• And… EPS for the coming year are expected to SHRINK by some 0.46%, according to consensus.  So where’s the future for this pile of cloth?
• Apparently, it doesn’t exist.  At least, according to insiders.  They’ve unloaded 35.09% of their hoard in the last six months for a $22 million take—nearly all of which was pocketed in the last 60 days!

Maybe they’re on to something…?

Have a look at the chart—

The fish have been dried.

The nets hung.

And the clothing’s in tatters.

A HEALTHY, HAPPY AND PROSPEROUS NEW YEAR

TO ALL YOU GOOD JEWS AND NOAHIDES!

Many happy returns!

Matt McAbby

Follow @HughLOHaynew