Abercrombie Fitch has a beta of 1.606. Let's try to break down what Abercrombie's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Abercrombie Fitch will likely underperform. The beta indicator helps investors understand whether Abercrombie Fitch moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Abercrombie deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Abercrombie Fitch. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Predictive Modules for Abercrombie Fitch
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Abercrombie Fitch's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Abercrombie Fitch. Your research has to be compared to or analyzed against Abercrombie Fitch's peers to derive any actionable benefits. When done correctly, Abercrombie Fitch's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Abercrombie Fitch.
How important is Abercrombie Fitch's Liquidity
Abercrombie Fitch
financial leverage refers to using borrowed capital as a funding source to finance Abercrombie Fitch ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Abercrombie Fitch financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Abercrombie Fitch's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Abercrombie Fitch's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Abercrombie Fitch's total debt and its cash.
Abercrombie Fitch Gross Profit
Abercrombie Fitch Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Abercrombie Fitch previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Abercrombie Fitch Gross Profit growth over the last 10 years. Please check Abercrombie Fitch's
gross profit and other
fundamental indicators for more details.
Breaking it down a bit more
Abercrombie Fitch exhibits very low volatility with skewness of -0.9 and kurtosis of 1.16. However, we advise investors to further study Abercrombie Fitch technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Abercrombie Fitch's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Abercrombie Fitch's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Abercrombie Fitch Implied Volatility
Abercrombie Fitch's implied volatility exposes the market's sentiment of Abercrombie Fitch stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Abercrombie Fitch's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Abercrombie Fitch stock will not fluctuate a lot when Abercrombie Fitch's options are near their expiration.
Returns Breakdown
| Return on Investment | 7.12 |
| Return on Assets | 0.0558 |
| Return on Equity | 0.17 |
| Return Capital | 0.1 |
| Return on Sales | 0.0637 |
Are Abercrombie Fitch technical indicators showing a reversion?
Latest value at risk indicator falls down to -7.31. Possible price growth? Abercrombie Fitch exhibits very low volatility with skewness of -0.9 and kurtosis of 1.16. However, we advise investors to further study Abercrombie Fitch technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Abercrombie Fitch's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Abercrombie Fitch's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Abercrombie Fitch Implied Volatility
Abercrombie Fitch's implied volatility exposes the market's sentiment of Abercrombie Fitch stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Abercrombie Fitch's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Abercrombie Fitch stock will not fluctuate a lot when Abercrombie Fitch's options are near their expiration.
Our Conclusion on Abercrombie Fitch
Although some other companies in the apparel retail industry are either recovering or due for a correction, Abercrombie may not be as strong as the others in terms of longer-term growth potentials. With a somewhat neutral outlook on your 90 days horizon, it may be better to hold off any trading activity and neither pick up new shares of Abercrombie nor exit your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Abercrombie Fitch.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Abercrombie Fitch. Please refer to our
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