B. Riley Downgrades American Eagle Outfitters (AEO); Hedge Funds’ Sentiment Remain Stable

American Eagle Outfitters (NYSE: AEO) on April 18 entered 1.34% lower in pre-market charts to $13.24, after B. Riley downgraded the company’s shares to “neutral” from “buy” and plucked $3 from its price target to $15 per share, according to a Street Insider report.

The company most recently entered into a new 52-week low and has been battling red in the charts as of late due to challenges in the industry of clothing retailers.

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What Does The Smart Money Sentiment Say?

The Smart Money sentiment remain relatively stable of American Eagle Outfitters (NYSE: AEO) as we saw slight tick in activity among the hedge funds we track at Insider Monkey. Out of 742 hedge funds we track, 27 held their positions valued at $295 million shares by the end of Q4, compared to only 26 funds who held their positions valued at $274 million by the end of Q3 2016.

If we take a closer look into hedge funds’ activities, Chuck Royce of Royce & Associates increased its activity on American Eagle Outfitters (NYSE: AEO) by 26% by the end of December 2016. Royce currently holds over 4.7 million shares valued at $71 million. The same is true for Cliff Asness of AQR Capital Management which bumped its activity by 15% and now holds over 4 million shares valued at $61 million.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

The Bottom Line

American Eagle Outfitters (NYSE: AEO) is in the spotlight amid a downgrade from B. Riley and lowered price target by $3 to $15 per share. For further reading, here are 10 easiest celebrities to dress up as.