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Why American Eagle Outfitters (AEO) Could Be a Top Value Stock Pick

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Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; American Eagle Outfitters, Inc. (AEO - Free Report) .

American Eagle Outfitters in Focus

AEO may be an interesting play thanks to its forward PE of 15.1, its P/S ratio of 0.8, and its decent dividend yield of 2.9%. These factors suggest that American Eagle Outfitters is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that AEO has decent revenue metrics to back up its earnings.

American Eagle Outfitters, Inc. PE Ratio (TTM)

But before you think that American Eagle Outfitters is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 2.7% in the past 30 days, thanks to eight upward revisions in the past one month compared to none lower.

This estimate strength is actually enough to push AEO to a Zacks Rank #1 (Strong Buy), suggesting it is poised to outperform. You can see the complete list of today’s Zacks #1 Rank stocks here.

So really, American Eagle Outfitters is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

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