Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, teen-oriented clothing retailer American Eagle Outfitters (NYSE: AEO ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.
With that in mind, let's take a closer look at American Eagle's business, and see what CAPS investors are saying about the stock right now.
American Eagle facts
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Headquarters (Founded)
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Pittsburgh (1972)
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Market Cap
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$3.05 billion
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Industry
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Apparel Stores
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TTM Revenue
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$3.07 billion
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Management
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CEO James O'Donnell (since 2003)
CFO Joan Hilson (since 2006)
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Franchises
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American Eagle Outfitters, aerie, MARTIN + OSA, 77kids
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Return on Equity (avg. last three years)
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27.2%
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Major Competitors
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Abercrombie & Fitch (NYSE: ANF )
Aeropostale (NYSE: ARO )
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CAPS members bullish on AEO also bullish on
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Apple (Nasdaq: AAPL )
Buffalo Wild Wings (Nasdaq: BWLD )
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CAPS members bearish on AEO also bearish on
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General Motors (NYSE: GM )
Ford Motor (NYSE: F )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, 95% of the 684 All-Star members who have rated American Eagle believe the stock will outperform the S&P 500 going forward. These All-Star bulls include tomholcomb3780 and verylargelarry, both of whom are ranked in the top 15% of our community.
Last week, tomholcomb touched on American Eagle's rock-solid financial position:
No debt. Free Cash Flow of $4.10 per share (3.47 multiple to Friday's close-$14.25). I believe american consumers have learned a 'hard lesson' and will continue to be cost conscious even after the economy is back on track-this would bode well long term for [American Eagle].
An pitch from verylargelarry in late March echoes that bullish sentiment, focusing on the company's capacity to bounce back:
could be a while coming, but the stock will eventually rise as this company distinguishes itself from the competition in that they have little debt of any kind, have worked over their inventory level finally, and have a neat price point niche carved out among the stylish youngsters they serve. they'll grab business from the pricier stores as the general malaise in our economy takes cash out of our national pocket book.
What do you think about American Eagle, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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