Momentum & Growth

Insider Financial Trading Update For 02/21/2020

This week was a big one as a lot of our old names continue to work for us here at Insider Financial.

Stocks like $BTAI$SPCE$BLDP$JNUG$ZM$MU$AMD$S$CLDR, and $UBER. All write-ups are date and time stamped on Trading View, so none of this is Monday morning quarterbacking.

For today, we like $GRUB and $AEO.

$GRUB looks like it’s ready to make a move higher. The stock is still 30% off its 52-week highs and 19.23% of the float is short, so there’s plenty of short covering that can take place. There also could be some M&A happening in the food delivery space. DoorDash (DOORD), Postmates (NYSE:POST) and Uber Eats ( NYSE:UBER ) have been in various merger talks over the last year, sources confirm to The Wall Street Journal. Grubhub (NYSE:GRUB) wasn’t mentioned in those particular discussions, but is believed to also be open to a deal of some sorts.

Grubhub Inc ., together with its subsidiaries, provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company connects approximately 105,000 local restaurants with diners with diners in various cities. It offers Grubhub , Seamless, and Eat24 mobile applications and mobile Websites; and operates Websites through grubhub .com, seamless.com, eat24.com, and menupages.com. The company also provides corporate program that offers employees with various food and ordering options, including options for individual meals, group ordering, and catering, as well as proprietary tools that consolidate various food ordering into a single online account. In addition, it offers Allmenus.com and MenuPages.com, which provide an aggregated database of approximately 440,000 menus from restaurants in 50 U.S. states; Grubhub for Restaurants, a responsive Web application that can be accessed from computers and mobile devices, as well as Grubhub-provided tablets; point of sale ( POS ) integration, which allows restaurants to manage Grubhub orders and update their menus directly from their existing POS system; and Website and mobile application design and hosting services for restaurants, as well as technology and fulfillment services, including order transmission and customer relationship management tools. The company was formerly known as GrubHub Seamless Inc. and changed its name to Grubhub Inc . in February 2014. Grubhub Inc . was founded in 1999 and is headquartered in Chicago, Illinois.

$AEO has a multiple bottom in place and is on the verge of breaking out of the downtrend line. With the stock trading at just 9.7x earnings , there’s been talk of M&A happening in the beaten-down retail space. Citi sees M&A optionality with Abercrombie & Fitch (NYSE:ANF). The firm thinks Amazon (NASDAQ:AMZN) should take a look at an acquisition or a merger with American Eagle Outfitters (NYSE:AEO) should be considered.

Also within the apparel sector – PVH (NYSE:PVH), V.F. Corp. (NYSE:VFC) and Capri Holdings (NYSE:CPRI) are seen as potential buyers of an attractive brand like Decker Outdoors’ (NYSE:DECK) Hoka brand or Oxford Industries’ (NYSE:OXM) Tommy Bahama, Lilly Pulitzer and Southern Tide brands. Columbia Sportswear (NASDAQ:COLM) and L Brands’ Victoria’s Secret business (NYSE:LB) are mentioned as potential targets.

There’s also room for short covering as 14.5% of the float is short.

American Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company also provides jeans, and other apparel and accessories for men and women; and intimates, activewear, and swim collections, as well as personal care products for women. In addition, it offers sports apparel under the Tailgate brand; and menswear products under the Todd Snyder New York brand name. As of March 6, 2019, it operated approximately 934 American Eagle stores, 262 Aerie stores, 5 Tailgate stand-alone stores, and 1 Todd Snyder stand-alone store in the United States, Canada, Mexico, China, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 231 locations operated by licensees in 24 countries, as well as provides products through its Websites ae.com, aerie.com, and ToddSnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

As always, trade with caution and use protective stops.

Good luck to all!

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Disclosure: At the time of this writing, we have no positions in any of the stocks mentioned. We are not financial advisors. Please read our full disclaimer for more information.

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Insider Financial Trading Update For 02/21/2020
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