Some Thoughts On American Eagle (AEO)

There are quite a few rumors out today that American Eagle Outfitters (NYSE: AEO) might be the subject of takeover rumors, as the options action indicates severe bullishness on the stock.

There are unconfirmed takeover rumors regarding American Eagle today, with possible price targets in the low $20.00 range.

Patty Edwards, a noted retail expert, and frequent CNBC contributor, recently noted that the chairman picked up 500,000 shares of the teen retailer, and a leveraged buyout might be the most likely end result for American Eagle.

Nonethless, speculation is rampant on Wall St. today that something is brewing with the teen retailer, whose stock has lagged recently.

Options traders are active in the stock today, as the October $16.00 strikes traded 4,700 times on open interest of 665 contracts, followed by the November $16.00 and $17.50 strikes, which traded 2,200 times and 1,900 times, respectively.

11,000 calls have traded already, versus 1,000 puts, indicating extreme bullishness on the stock.

At last check, shares of American Eagle were up 49 cents or 3.3% to $15.40 on 1.8 million shares already.

American Eagle is a apparel and accessories retailer in the United States and Canada. The company offers denim wear, sweaters, graphic t-shirts, fleece, outerwear, and accessories targeting 15 to 25 year old girls and guys.