What happened
One of the more encouraging moves a publicly traded company's managers can make is to buy stock in their own business. That was the dynamic behind the 4%-plus stock pop of retailer American Eagle Outfitters (AEO -0.13%) on Wednesday.
So what
Not one but two members of American Eagle's board have loaded up on American Eagle stock. According to a regulatory filing made public late Tuesday, Noel Spiegel divulged that he purchased 20,000 of American Eagle's common shares at a price of $12 apiece last Friday. His fellow board member David Sable picked up 1,000 of the same shares, paying just over $11.77 apiece for the privilege on Tuesday.
Both men were reelected to their positions at the company's latest annual general meeting, which was held last week.
Now what
American Eagle's prospects seem to be brightening, as the lingering coronavirus pandemic isn't keeping shoppers from flocking to retail stores. The company is benefiting from this with net revenue that has been rising lately, and has topped even comparable quarters from the pre-pandemic year of 2019. And although it cut its full-year guidance, it's still expecting operating profit above both the 2019 and 2021 results.
Not everyone has the confidence in American Eagle demonstrated by Spiegel's and Sable's stock buys. In its latest reported quarter, the company missed widely on the average profitability estimate, and also whiffed on revenue. In the wake of those misses, two investment banks -- Morgan Stanley and JPMorgan Chase -- downgraded their recommendations on the stock.
