American Eagle Outfitters (NYSE:AEO)

CAPS Rating: 3 out of 5

The Company designs, markets and sells its own brand of laidback, current clothing targeting 15 to 25 year-olds, providing high-quality merchandise at affordable prices.

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Member Avatar assassin17 (< 20) Submitted: 2/4/2014 2:34:19 AM : Outperform Start Price: $12.64 AEO Score: +14.65

No debt, and decent 3.7% yield. The former gives the company time to turn around any sales issues, and the latter pays investors to be patient.

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Member Avatar tiobueno (99.53) Submitted: 1/27/2014 4:29:49 PM : Outperform Start Price: $12.72 AEO Score: +15.70

SCHOTTENSTEIN JAY L
Executive Chairman of the Board
Jan 24 Buy 12.84 500,000 6,420,000 2,534,560
Jan 27 03:15 PM

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Member Avatar BuylowPE (54.22) Submitted: 12/20/2013 3:29:52 PM : Outperform Start Price: $13.86 AEO Score: +7.12

Teen jobs have been hard hit by the recession and have been slow to return. As teens get jobs they will buy more clothes, and American Eagle is in good shape to reap the benefits.

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Member Avatar poluh2k (47.58) Submitted: 12/17/2013 5:37:58 AM : Outperform Start Price: $13.57 AEO Score: +8.26

I hope clother retales go out from depressing situation in next three yaers. Good p/e 12,7 and p/s 0,8

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Member Avatar tavo2311 (44.15) Submitted: 11/9/2013 5:55:26 PM : Outperform Start Price: $15.63 AEO Score: -9.39

This company is oversold right now. The management has always managed to shareholder value and they have no short term debt. It also yields 3.10% which is nice insurance in the short term. Finally it is "cheap" trading at ~13x earnings

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Member Avatar rknapton (< 20) Submitted: 8/26/2013 8:05:15 PM : Outperform Start Price: $13.73 AEO Score: -3.61

Long. Retailer’s stock has really lagged this past year and gotten slaughtered lately, however now I’m liking it at 13x ttm and 12x forward estimates. Nice balance sheet so hefty dividend isn’t in jeopardy at all.

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Member Avatar thequast (92.12) Submitted: 8/21/2013 1:14:51 PM : Outperform Start Price: $13.03 AEO Score: +5.32

Down big-time on soft guidance which is a valid concern. But at under 10 forward p/e, and a 3% dividend, and zero debt, I believe this stock has hit the bottom

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Member Avatar BobHGlassLT (< 20) Submitted: 3/11/2013 11:54:48 AM : Outperform Start Price: $19.30 AEO Score: -45.74

Cutting costs across the board. AEO hiring the former CEO of Levi was a great management idea.

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Member Avatar drdm (73.16) Submitted: 3/6/2013 9:55:23 AM : Outperform Start Price: $18.59 AEO Score: -43.12

Market oversells due to prediction of slow first quarter, ignores increase in 4th quarter sales, 14% raise of dividends, and 20 mil in share repurchase program.

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Member Avatar NHWeston102 (68.89) Submitted: 2/18/2013 9:14:35 AM : Outperform Start Price: $19.45 AEO Score: -49.20

The Eagle flies in spring!! AEO has slowly wrested leadership in the teen fashion angst market from its competitors. As a teacher, I can tell you, teens can't afford their text books, but they seldom skimp on their "dressage". [Sorry, Rafalca...] May dip a bit in summer but "Back-to-School" Fall looks primo as well.

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Member Avatar EarlWeaverPort (80.69) Submitted: 1/23/2013 10:57:21 AM : Outperform Start Price: $19.00 AEO Score: -50.25

Catherine Baab-Muguira

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Member Avatar 3185296328795229 (68.79) Submitted: 10/30/2012 6:05:43 PM : Outperform Start Price: $19.25 AEO Score: -58.34

Popular brand. They're very good at advertizing and teens are a huge market. I think they'll continue to grow so long as the economy does. Teens are very concerned with their looks and popularity. And AEO is a company that meets their needs in those areas.

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Member Avatar xferjenx (42.37) Submitted: 5/6/2012 9:03:55 AM : Underperform Start Price: $16.97 AEO Score: +52.37

Big run-up...

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Member Avatar FacebooksTopCos (41.82) Submitted: 10/11/2011 8:58:05 AM : Outperform Start Price: $10.30 AEO Score: -10.98

Because it is ranked #15 of the top company pages on Facebook.

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Member Avatar ShawnRobinson (71.15) Submitted: 10/2/2011 9:18:18 PM : Outperform Start Price: $9.77 AEO Score: -12.03

Typically dont play the buyout game but this one just screams it too much

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Member Avatar smith972 (81.34) Submitted: 9/9/2011 4:23:53 PM : Outperform Start Price: $8.80 AEO Score: +10.02

Too large of a hair cut. I;m going with AEO.

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Member Avatar TMF1000 (99.77) Submitted: 9/8/2011 2:21:59 PM : Outperform Start Price: $9.09 AEO Score: +11.42

Caps price $10.94 giving them a 4% dividend yield.

Conclusion:

Investing in retail isn’t always easy. I always felt the restaurant part of my portfolio far more stable and much easier to predict, but if you are right with retail the rewards can be very great. Something else I like about retail is the seasonal patterns. If a company shows sales strength, but poor stock price action, every often the holidays will give it the needed rebound and make for a good trade.

AEO has a very deep customer base. They are cheaper than leader ANF, so they can’t raise prices too much to compensate for higher commodity prices. But higher cotton prices should be a temporary problem.

They are financially strong. They have $515 million in cash and no debt. They reported TTM cash flow of $184.8 million or $0.94 per share down from TTM cash flow of $227.6 million or $1.12 last year. Sales grew 3.7% in the quarter which may signal a stabilization of the business which bodes well for the holiday season.

Last year, they paid out $183 million in dividends, but $0.50 per share was a special dividend paid in 2010. This year, excluding a special dividend their dividend obligations should be about $86 million. Since they are reporting about $184 million in TTM cash flow, the dividend should be very safe and they could even raise it or pay another special dividend. Presently their annual dividend is $0.44 which gives them a yield of 4%.

I think AEO is a good risk. I think they are developing businesses that will help them compete with others in their industry. And there are those in their industry that aren’t doing well and may disappear soon giving them more market to grab. I own ARO and ANF, but at the 4% yield, I think AEO would make a good addition to my portfolio. I think they are positioning themselves well for the holidays.

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Member Avatar Jeffrey2012 (< 20) Submitted: 9/2/2011 4:13:52 PM : Underperform Start Price: $8.49 AEO Score: -18.48

Company is doing poorly due to teen unemployment and poor economy. Teen retailers are getting destroyed and fundamentally face significant headwinds as they try to get out of this rut. Not to mention their styling is pretty dated considering every teeny bopper is seeing the same products amongst the retailers in this group. The only teen retailer worth purchasing is Abercrombie from a fundamental standpoint.

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Member Avatar x6unsound (< 20) Submitted: 7/7/2011 9:41:29 PM : Outperform Start Price: $11.46 AEO Score: -8.12

American Eagle is a cyclical company with strong fundamentals that has been facing recessionary headwinds, business will pick up when consumer discretionary spending goes up. They have a fortress balance sheet, massive amounts of free cash flow relative to GAAP earnings, lots of expansion opportunities both domestic and international, and their clothes are stylish and resonate with their target demographic. They also pay a beefy dividend - factor in this year's special dividend and you get a 7% yield. Insiders have been buying shares like crazy with their own money for the past year. This stock is a win.

More in-depth analysis here: http://seekingalpha.com/article/277936-american-eagle-outfitters-a-prime-buying-opportunity-for-value-investors

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Member Avatar drey72 (72.96) Submitted: 3/17/2011 9:24:47 PM : Outperform Start Price: $12.40 AEO Score: -25.13

This company has no debt good cash flow and is very undervalued in my humble opinion.

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