StockStory Backs Abercrombie & Fitch, Flags 2 Russell 2000 Stocks to Sell

1 articles · Updated · Yahoo Finance · Aug 17

Abercrombie & Fitch was singled out as StockStory’s Russell 2000 buy pick, with 7.3% average same-store sales growth over two years, a 62.4% gross margin and 147% annual EPS growth over three years.
PubMatic and Wolverine Worldwide were tagged as sells because StockStory sees weaker operating momentum and tighter cash generation at both companies.
PubMatic’s concerns include a 96% net revenue retention rate, rising sales-and-marketing pressure and an expected 11.5-point contraction in free cash flow margin; its shares trade at 2.5x forward sales.
Wolverine’s sales have fallen 1.9% annually over five years, EPS has slipped 2.2% a year and free cash flow margin was 8% over the last two years, with the stock at 11.3x forward earnings.
The call underscores the higher-risk, higher-volatility nature of small-cap investing, where StockStory says stock selection is critical within the Russell 2000.