Mad Money

Is American Eagle Set to Take Flight?

If insider buying is any indication of a company’s potential, then American Eagle Outfitters could be a buy, Cramer said.

Clothes Minded

Just last week, two executives made big purchases, one of them being Chairman Jay Schottenstein, who picked up 150,000 shares.

Schottenstein served as CEO between 1992 and 2002, and he has been with the company since 1980. At one point in 1997, he owned 28% of the company, but sold his way down to 5%. Now he’s a buyer again. And if his timing is as perfect as the last time he bought shares – AEO’s bottom in September 2005 – the company could be set to move.

“I'd follow this guy,” Cramer said. “He knows what he’s doing.”

Add to this, American Eagle is trading at just 12 times next year’s earnings, next year the stock should face easier comps, and it’s still unloved by the Street.

“I think it’s time to think about buying this one,” Cramer said.

He recommends waiting until at least the end of this week, if not the beginning of next week if investors plan to buy AEO.

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