Stocks chosen for our "Buy Low Opportunities Portfolio" are ones that appear capable of a big rebound from recent lows, explains Crista Huff. Here, the editor of Cabot Undervalued Stocks Advisor highlights two such stocks in the footwear and apparel sector.

Abercrombie & Fitch (ANF) is a specialty retailer of Abercrombie & Fitch (a.k.a. A&F), abercrombie kids, and Hollister brand apparel and accessories for men, women and kids.

The company operates over 850 stores globally. The company remains on track toward its multi-year goals of improving revenue, profits, expense-control, data analytics, online sales and global store expansion.

ANF is an undervalued small/micro-cap stock. Wall Street projects EPS to fall 34% in 2019, then rise 70% in 2020. The 2020 P/E is 13.2.

The drop in 2019 profit largely reflects the expenses incurred by closing several flagship stores that were not built by the current management team, who are successfully focused on lease negotiations, small-store formats, revenue and gross margin.

The stock has a yield of 4.7%. It's trading range is roughly 14-19. I think there’s a decent chance that ANF could surpass 19 in November. I rate the stock a buy.

Designer Brands Inc. (DBI) is one of North America’s largest designers, producers and retailers of footwear and accessories. The company operates DSW Warehouse, The Shoe Company and Shoe Warehouse stores with nearly 1,000 locations in 44 U.S. states and Canada; and Camuto Group.

Designer Brands — with a yield of 5.7% — is an undervalued, small-cap growth stock. The company has delivered 27 consecutive years of revenue growth.

There’s very little corporate or Wall Street news on Designer Brands, in between the quarterly earnings reports. Analysts expect EPS growth rates of 14.5% and 14.7% in 2019 and 2020 (January year end); and company management is projecting 2021 EPS growth of about 24%.

The 2020 P/E is very low at 8.0. The stock has traded between 16-17.5 since early September, and appears ready to climb toward price resistance at 19. Buy Designer Brands now for outsized total return potential in 2019 and beyond. The stock earns my strong buy rating.

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