Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, teen-oriented apparel retailer American Eagle Outfitters (NYSE: AEO ) has earned a respected four-star ranking.
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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$2.73 billion
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Industry
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Apparel stores
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Trailing-12-Month Revenue
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$2.93 billion
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Management
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CEO James O'Donnell (since 2003)
CFO Joan Hilson (since 2009) |
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Return on Equity (average, past 3 years)
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12.9%
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Cash/Debt
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$605.2 million / $0
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Dividend Yield
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3.1%
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Competitors
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Abercrombie & Fitch (NYSE: ANF )
Guess? (NYSE: GES )
Urban Outfitters (Nasdaq: URBN ) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 94% of the 2,344 members who have rated American Eagle believe the stock will outperform the S&P 500 going forward. These bulls include jukebox71 and x6unsound.
A couple of months ago, jukebox71 touched on American Eagle's expansion plans: "it's adding lingere stores (aerie) as well as stores for the younger market (77kids). lots of growth potential for an already established name."
Currently, American Eagle even sports a cheapish price-to-cash flow of 7.6. That represents a discount to industry peers such as Abercrombie (16.6), Guess (11), and Urban Outfitters (15.5).
CAPS member x6unsound expands on the turnaround opportunity:
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. ... This stock is a win.
What do you think about American Eagle, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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