Shares in American Eagle Outfitters (AEO, Financial) were selling for 4.56% more on Tuesday than they did on Monday after Jay L. Schottenstein, AEO’s executive chairman and interim CEO, purchased nearly 150,000 shares in the company on Monday.
It is Schottenstein’s second investment in AEO this year. In Monday’s transaction, Schottenstein acquired 148,942 shares for $14.13 a share; ultimately the purchase was worth $2,104,550. His earlier purchase was for $6.42 million when shares sold at a price of $12.84 each.
The stock was selling for $14.84 per share at the end of trading Tuesday.
Last week, GuruFocus reported that AEO had been struggling to find its market niche in a highly competitive field against the likes of Urban Outfitters (URBN, Financial) and G-III Apparel (GIII). G-III, GuruFocus wrote last month, is in position to deliver long-term results for investors.
With no debt to speak of, AEO’s low debt-to-equity ratio could be very appealing to investors. GuruFocus rates the company’s financial strength an impressive 8/10.
However, return on equity has gone down dramatically since the same time period in 2013, which could make investors pause before acquiring AEO stock.
At the end of June, gurus Ray Dalio (Trades, Portfolio) and Richard Snow (Trades, Portfolio) added to their positions in AEO while Chuck Royce (Trades, Portfolio), John Hussman (Trades, Portfolio) and Jim Simons (Trades, Portfolio) reduced theirs and Kyle Bass (Trades, Portfolio) sold out of his holdings.
Based in Pittsburgh, Pennsylvania, AEO designs and sells its own line of casual clothing for young adults, primarily in the 15-25 age range. It was founded as a subsidiary of Retail Ventures in 1977.
