American Eagle Outfitters (NYSE:AEO) might just be a buy.
In the financial world, there are dozens of gauges market participants can use to track their holdings. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outpace their index-focused peers by a superb amount (see just how much).
Just as key, positive insider trading sentiment is a second way to look at the world of equities. There are a number of stimuli for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).
What’s more, let’s discuss the recent info surrounding American Eagle Outfitters (NYSE:AEO).
What have hedge funds been doing with American Eagle Outfitters (NYSE:AEO)?
At the end of the second quarter, a total of 27 of the hedge funds we track were bullish in this stock, a change of 17% from the first quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.
When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in American Eagle Outfitters (NYSE:AEO), worth close to $234.1 million, comprising 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $55.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Robert Bishop’s Impala Asset Management.
With a general bullishness amongst the titans, certain bigger names have been driving this bullishness. Royce & Associates, managed by Chuck Royce, initiated the most valuable position in American Eagle Outfitters (NYSE:AEO). Royce & Associates had 234.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $55.6 million position during the quarter. The other funds with brand new AEO positions are Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management, and Robert Bishop’s Impala Asset Management.
Insider trading activity in American Eagle Outfitters (NYSE:AEO)
Insider buying is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest 180-day time frame, American Eagle Outfitters (NYSE:AEO) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to American Eagle Outfitters (NYSE:AEO). These stocks are Foot Locker, Inc. (NYSE:FL), Chico’s FAS, Inc. (NYSE:CHS), DSW Inc. (NYSE:DSW), Ascena Retail Group Inc (NASDAQ:ASNA), and Abercrombie & Fitch Co. (NYSE:ANF). This group of stocks are the members of the apparel stores industry and their market caps match AEO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Foot Locker, Inc. (NYSE:FL) | 34 | 0 | 5 |
| Chico’s FAS, Inc. (NYSE:CHS) | 19 | 0 | 6 |
| DSW Inc. (NYSE:DSW) | 14 | 0 | 7 |
| Ascena Retail Group Inc (NASDAQ:ASNA) | 19 | 0 | 3 |
| Abercrombie & Fitch Co. (NYSE:ANF) | 31 | 1 | 4 |
Using the results explained by the previously mentioned studies, regular investors must always track hedge fund and insider trading activity, and American Eagle Outfitters (NYSE:AEO) is no exception.
