Comments on: American Eagle Outfitters Moat Check

By: Swimmer

Swimmer — Fri, 10 Mar 2006 00:00:29 +0000

Hi there -

I took the Formula a little further than you - investing a cool $50K based on the formula (and a few of my own thoughts on this (I started with 50 and narrowed it to 20).

Good thing (at least so far) that AEOS was one of them - they came out with a good earnings - better than GAP for example and the stock is up 10%.

As for my portfolio - just check my blog at http://realmagicformulatest.blogspot.com/

Thanks for your thoughts -

Swimmer

By: Exploring Greenblatt’s Magic Formula - Fat Pitch Financials

Exploring Greenblatt’s Magic Formula - Fat Pitch Financials — Sun, 05 Feb 2006 21:40:32 +0000

[...] Contact : Sunday, February 5th, 2006 « Financials Carnivals American Eagle Outfitters Moat Check » [...]

By: MarketWizWannabe

MarketWizWannabe — Fri, 03 Feb 2006 17:25:30 +0000

AEOS was recently trading at a 12x multiple, which, for a retailer growing like it is was too low. It’s still only at 14, which is still too low in my opinion.

But, the poster above who mentioned same-store sales and saturation of stores could be on to something…retailers are very much driven by those numbers.

As for the products itself, if you’re in the mall, you know AE. It has appeal to most teens and young adults and it captures a nice price for its clothes. It’s pretty much a staple in malls - but much hipper than the Gap. (Who isn’t)

Good company, good stock, could be tough to buy and hold on forever because of the nature of finicky fashion trends.

By: PHOSITA

PHOSITA — Mon, 30 Jan 2006 14:43:14 +0000

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By: wmiguy

wmiguy — Thu, 26 Jan 2006 22:11:50 +0000

I havn’t looked at AEOS in quite a while, but you might want to consider the same store sales numbers.

Also, consider market saturation… how many stores do they have, vs. how many potential locations (e.g. how close are they to saturating north america ala starbucks)?

With that, and most importantly, where’s the growth coming from 6 - 12 months out?

Looking at the 3-month chart; are they seem to be trending up… bouncing off the 10-day moving average… now might be a good time to pick some up… consider half-a-position, and then wait until it pulls back closer to 25 to fill-out your position.

By: Ron

Ron — Thu, 26 Jan 2006 07:17:07 +0000

You might want to check on the purchases of the chairman last year and also the buybacks the company has and intends to buy back. Pretty compelling maybe?

By: Theo

Theo — Thu, 26 Jan 2006 04:33:45 +0000

Thanks for the post George, it was very well thought out. I don’t know much about determining moats per se, but I do like AEOS and have written a few articles on my blog:

http://www.stokblogs.com/taxonomy/term/24

cheers,

-theo