Finance

What Recent Ownership Trends Suggest About American Eagle Outfitters, Inc. (AEO)’s Future Performance

Recent insider trends for American Eagle Outfitters, Inc. (NYSE:AEO) have caught the attention of investors. Insider activity is often a strong indicator of future performance in a stock, and if the data on AEO is anything to go by, investors should pay attention.

Institutions own 83.34% of American Eagle Outfitters, Inc. (AEO)’s shares. The total value of these holdings, in millions, is $2,669. Among active positions in the latest quarter, 140 holders increased their positions by a total of 20.32 million shares, 136 holders decreased the positions by a total of 21.24 million shares, and 39 holders held their positions. This works out to a net decrease in ownership of 929021 shares, and suggests that institutions are feeling bearish about the stock.

Among new and sold out positions, 39 holders initiated new positions by a total of 10.09 million shares and 32 holders exited their positions by a total of 4.6 million shares. This nets out to an increase of 5.49 million shares and is a bullish sign for AEO.

In the last three months, insiders executed a total of 2 trades. 2 of these were buys. Insider ownership increased by a total of 3990 shares, which suggests that AEO’s key executives are feeling more optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 14 buys and 24 sells, and ownership decreased by a net of 484 shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. American Eagle Outfitters, Inc. (NYSE:AEO)’s short interest is 13.22 million shares, or 7.96% of the float. This represents a decrease of -33% in the number of shares being shorted compared to the previous reading, and implies that investors felt less pessimistic about the stock during the past two weeks.

Supplementing insider data with technical indicators can help an investor form a more complete view on the outlook for a stock. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that AEO is a Weak buy, which implies that AEO is expected to outperform the market based on prior trading patterns.

Conclusion




Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bullish. Technical indicators (also) suggest that American Eagle Outfitters, Inc. (NYSE:AEO) is undervalued.

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