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Interesting overview of AEO from a Magic Formula stock research site. The article agrees that Eagle is a well run company and is certainly cheap. The main concern is competition and lack of any built in competitive "moat". Such is life in retail...

http://www.magicdiligence.com/quick-take/AEO
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The main concern is competition and lack of any built in competitive "moat". Such is life in retail...

I don't particularly care for companies with moats. It breeds complacency. Give me one with plenty of ammunition as in an impeccable balance sheet and good cash flow any day.

C2H5SH
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Kahuna,CFA (Retired 1995)
Retired Investment Professional


Hi Kahuna,

I'd say this is an example where your preference for spelling things out completely, rather than using abbreviations, comes in handy. Otherwise, we'd have: Kahuna,CFA (Retired 1995), RIP

Glad that's not the case. :-)

Paul
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I am certainly glad that we are not adding RIP to Kahuna's moniker. Very much appreciate his insight and postings. His WSJ postings are also very much appreciated.
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Magic Formula, is that the guy form Morningstar ?


James
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Magic Formula, is that the guy form Morningstar ?

Magic Formula investing is the brainchild of Joel Greenblatt, which he laid out in The Little Book That Beats the Market. He essentially uses a formula that relies upon earnings yield (the inverse of P/E) and return on invested capital to find companies that are poised to move higher in price. It's a mechanical investing program that suggests buying companies that pass the screen and holding them for a year plus one day (to get better capital gains tax treatment). His research shows a pretty solid record, though that appears to be if one bought every stock that passed the screen (at least that's my thought).

There is a Magic Formula website where you can run the screen: http://tinyurl.com/5nafqf

and a Magic Formula board: http://boards.fool.com/Messages.asp?bid=117512

Hope that helps,

Paul
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Thanks for your relies to both Kahuna & TMF SLY.


I actually just finished reading that book and read I also read The Little Book That Builds Wealth. I think the later was by the Morningstar guy Pat Dorsey. Anyway therein lies my confusion.


Thanks again and thanks for making me aware of the Magic Formula board.

James
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