Just bought American Eagle Outfitters (AEO)

Historically, this company has operated within a lower and upper bound of around 10 and 20 or between a $1.75B and $3.5B market cap. Its current price is near the lower bound. The total long term debt is $0. It has approximately $5B in yearly revenue, $250M per year in net profit and has consistently paid at least an 11 cent dividend over the last 15 years for a sure fire yield of about a 4% dividend yield (about $80M of operating income), so they reasonably have at least $100M leftover. It seems like the worst case scenario would be basically sitting on a 2 year Treasury Note yield for a couple years.

But the upside is that new marketing may bump up revenue in the near term, and with fixed costs already baked in, any increases in revenue will bump net income at a higher multiple.

Do not take any investment advice from me and consult with your financial advisor before doing any buying. Investing involves risk – and yada, yada, yada, etc. These are merely my thoughts on why I bought the stock.