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Yesterday I bought American Eagle shares. I think this is one of the best managed of the teen/preteen retailers as measured by their consistent long term record of growth as well as EBITDA/EV of 16%, EBIT/EV of 14% and EBIT/Tangible-Capital of 74%. People fear sudden changes of fashion as well as a consumer slowdown due to the spread of subprime crisis, allowing me to pick up this stock on the cheap. I can't say whether this will show a significant gain in six months, but I think the stock should do well once the current subprime storm blows over.
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