Consumer Discretionary Recommendation

By Mason Littlejohn

NYSE: ANF | Current Price: $24.06

52-Week High: $32.83

52-Week Low: $15.42

Market Cap: $1.69 B

Dividend: $0.80 per share

Comparable Market Cap

Ratios

Quick Ratio: 1.39

Current Ratio: 2.2

LT Debt to Equity: 25.84%

Total Debt to Equity: 25.84%

The Bad

Revenue: Declined by 0.6% in 2016-Q4 on a YoY basis.

Revenue Decline: Average rate of 7.9% over the last 3 years.

Revenue Growth: At a compounded annual rate of 0.3% over the last 5 years.

Low Net profit margin: 5.2% in 2016-Q4.

Low Average Net profit margin: 0.8% over the last 3 years.

Low ROIC (Return on Invested Capital) of 3.7%.

Low ROE( return on equity) of 2.7%.

Revenue Catalyst & Cost Minimization

International Expansion: Yesterday Franchise agreement announced with Dubai-based Majid Al Futtaim Fashion bringing brands to Saudi Arabia, Qatar, Bahrain and Oman.

Currently: 8 Abercrombie stores in Kuwait and United Arab Emirates.

Operational Cuts: Closed/Closing Stores negatively impacting Net Income

The Good

Operating Profit Margin: 10.8% is 9.2% higher than the 3 year average operating margin.

Operating Cash Flow: 4.2 times the Net Income

Price to Book Ratio: Multiple of 1.2x vs. Industry Average (Retail-Apparel-Shoe) of 4.2.

Price to Sales Ratio: 0.5x vs. Industry Average (Retail-Apparel-Shoe) of 0.9.

NEW CEO: Arthur Martinez, chairman of Board former CEO Sears

ETF Recommendations

VanEck Vectors CEF Municipal Income: XMPT

FUND SUMMARYTracks the S-Network Municipal Bond Closed-End Fund IndexSM ("CEFMX Index").

The fund normally invests at least 80% of its total assets in investments the income from which is exempt from U.S. federal income tax (other than federal alternative minimum tax).

The CEFMX Index is comprised of shares of U.S.-listed closed-end funds.

Expense Ratio: 0.4%Annual Holdings Turnover: 6%

Current Price: $28.79 | YTD Return: 8.4%

iShares MSCI Emerging Markets: EEMFund Summary

Tracks MSCI Emerging Markets Index. The fund generally invests at least 90% of its assets in the securities of its underlying index and in depositary receipts repping index. The index is designed to measure equity market performance in the global emerging markets.

Expense Ratio: 0.69%

Annual Holdings Turnover: 10%

Current Price: $32.95 | YTD Return: 6.83%

Proposed Allocations

ANF: $8000 | 332 shares - Price: $24.06

XMPT: $15,000 | 520 shares - Price: $28.79

EEM: $20,000 | 605 shares - Price: $32.95