Retail-Apparel stocks have been hit hard due to the extreme cold weather conditions that have plagued most of the United States over the last two months, but a bottom could be finally in.
American Eagle (AEO) one of the biggest and most profitable teen retailers had strong insider buying today. Jay Schottenstein, the company’s interim CEO and Chairman stepped up big and recently purchased over 500,000 shares or more than $6 million dollars of the American Eagle’s stock at around $12.84 a share. This purchase occurred some time over the last two days.
Any insider who purchases over $5 million dollars worth of his company’s stock is always a significant and bullish sign — especially when the purchase comes after the stock has been in a significant decline.
Also, technically it looks like American Eagle has formed a double bottom at $13, with a bullish outside day — a major bullish reversal signal. With this, we may have seen the bottom in all retail and apparel stocks, and if so the risk reward of buying retail apparel companies has never been better.