3SOF

Some retailers are starting to look awfully cheap.  AEO especially.  Nice day today..up about 9%.  Trading near 52 week lows.  I see $40+ within a year, barring a major economic slowdown.

I guess I didn't really give any analysis.

Current PE is about 13, it usually trades at a PE of between mid teens and low 20s.  Once it hits the low 20s PE range, earnings could be much higher.  Of course the price is down because of the expected economic slowdown, but I think it's overly priced in. 

I believe AEO is an excellent growth stock trading at an excellent value.

nice pick, applauds

AEO: SG Cowen Ups to Outperform from Neutral; Analyst Notes
Tuesday , September 04, 2007 09:29ET
Issuer: American Eagle Outfitters Inc (NYSE: AEO)
Analyst Firm:  SG Cowen & Co.
Ratings Action: UPGRADE
Current Rating: Outperform (from Neutral)
Analyst Comments: The firm looks for the shares to outperform the market by at least 15% over the next 12 months. They anticipate favorable August sales trends (to be reported 9/5) should allay the substantial concern surrounding AEO's ability to anniversary difficult comps and peak operating margins. They look for AEO to report August comps of at least +5-7% with additional upside possible and likelihood of an upward revision to Q3 EPS guidance. With shares trading substantially below historical levels, the firm recommends investors purchase AEO in advance of the upcoming sales announcement as they believe indications of ongoing strength in the core American Eagle business should more than offset ongoing concerns related to Martin + Osa and overall square footage growth potential for the company with additional downside protection from ongoing share repurchase activity (23.5mm shares available for repurchase represents 10% of float).

&

American Eagle Outfitters Reports August Sales of $311.3 Million; Same Store Sales Increase 9%
Wednesday, September 05, 2007 16:00ET

PITTSBURGH, Sep 5, 2007 (Canada NewsWire via COMTEX) -- Reiterates Third Quarter EPS Guidance

American Eagle Outfitters, Inc. (NYSE:AEO) today announced that total sales for the four weeks ended September 1, 2007 were $311.3 million, an increase of 13% compared to $276.6 million for the four weeks ended August 26, 2006. Due to the 53rd week in fiscal 2006, August 2007 comps are compared to the four week period ended September 2, 2006. On this basis, comparable store sales increased 9%, compared to a 16% increase for the same period last year.
August sales reflected the company's strong position as a destination for back-to-school shopping, as well as the company's commitment to delivering relevant collections that strike the right balance between fashion basics and on-trend items.
Total sales for the year-to-date 30 week period ended September 1, 2007 increased 16% to $1.627 billion, compared to $1.401 billion for the 30 week period ended August 26, 2006. Comparable store sales increased 5% for the year-to-date period.
The company is reiterating its third quarter earnings guidance of $0.47 to $0.48 per share, compared to $0.44 per share last year.

cheers
Oliver

Bought a half position after hours today at 1 cent above closing price, 25.50.

I'm happy if it drops a few points and I can average down a bit, and I'm happy to pay a couple bucks more if things are looking good.  The value here is undeniable for me.

Well, I would up selling that AEO for a small lose after I got impatient after a couple weeks.  And I think I had my heart set on some other stocks..ahh.

Anyway, its a good thing I did.  My account is getting verified for options trading, I just sent the form in today.  I'm thinking about getting some AEO LEAPs for January 09.  The 35s are $1.05 and the $40s are $0.60 on the ask.  I think AEO will make a run to the mid to upper 30s sometime in the next few months..and I think these options will pay off significantly.  I will update thread if I follow through with this. 

I have no intention of becoming an options trader, this is simply a highly risky long term investment I suppose.  Also, very small investment.  1/4 a usual holding is what I'm planning on.

Edit: I'll add a bit of meat to this post.  ARO, a company very similar to AEO, has made a nice run already and is consolidating the gains nicely above the 200 ma.  I think AEO is next, as the fundamentals haven't really deteriorated nearly to the point the market predicts, by my estimation.

I believe the indecision in the ADX (at the bottom of the daily chart) predicts a change in trend. 

AEO is simply valued way too cheap for a growth company..imo