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Author: luke77 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14303  
Subject: AEOS Date: 9/2/2005 6:24 PM
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Sorry if this is OT - I'm new to the Fool and didn't see an FAQ for this board. With a name like "Falling Knives" I figure you guys are looking at stocks that have been beaten down in the short term, for whatever reason. I'm interested if anyone has an opinion on American Eagle, which was highlited in an MF article yesterday. It has dropped quite a bit recently after news that the CFO is leaving the company. Being a college student I am familiar with AE's strong brand name and quality products, and it seems that they continue to display strong sales growth. Although I'm concerned about the retail picture in the near future (with the current gas prices), it seems like now might be a good time to pick up shares that may be undervalued. Any thoughts?

Ben
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Author: gebinr Big gold star, 5000 posts Top Recommended Fools Old School Fool Supernova Phoenix 1
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Subject: Re: AEOS Date: 9/2/2005 9:53 PM
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Hi Ben,

TMFBrent, the author of the article yesterday which you referenced, posted this on one of the Inside Value boards. Hope it helps answer your questions.

gebin

The haircut this company got today is just insane.

I wrote about it on the front page. I've written about them in the past.
I hold shares, so you might think I'm biased, but this is one of the best run retailers in the country right now, positioned in a very sweet niche (Abercrombie-ish, but with prices that can compete with low-end discount stores).

I suggest my IV types take a look. If I hadn't been blabbing about it lately and locking myself out due to our trading rules, I'd be buying more. But that's just me. Hey, maybe I'm wrong.

But a retailer with a bottom line growing like theirs (nearly 30% over the past 3 years, and faster now) with good free cash flow, a near 1.5% dividend yield, ROIC in the high teens, no debt, a PILE of cash, top line growth near 20%, trading at a P/E of 14 and an EV/EBITDA ratio of less than 7.

Take a peek.

Sj



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Author: TMFKitKat Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Feste Award Winner! Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 352 of 14303
Subject: Re: AEOS Date: 9/2/2005 10:08 PM
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Hi

This is a company I would like to own. Haven't looked in depth--might be time

Not to be impertinent but a 54¢ loss today is hardly a haircut. Can't tell you how disappointed I was to look further into it and find the drop was not measured in dollars. One can only hope

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Author: luke77 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 353 of 14303
Subject: Re: AEOS Date: 9/3/2005 1:04 AM
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The haircut he is referring to happened on thurs. - down about $2.50. The only thing that concerns me is the insider trading - yahoo says 6 million shares sold (!). I'm not sure if I'm reading this right though, because I'm not sure what an "Automatic sale" or "Aquisition at $0 a share" means. This much selling is worrisome, but nothing else about the stock looks bad...

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