Coach, Inc. (NYSE:COH)

CAPS Rating: 4 out of 5

The Company is a American marketer of fine accessories and gifts for men and women. Its product offerings include handbags, women's and men's accessories, footwear, outerwear, business cases, sunwear, watches, travel bags, jewelry and fragrance.


Player Avatar Gibybo (94.50) Submitted: 2/25/2013 3:37:58 PM : Outperform Start Price: $44.77 COH Score: -50.63

Strong brand, strong margins, cheap P/E

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Member Avatar KickBackAt40 (86.29) Submitted: 2/25/2013 8:58:05 PM
Recs: 0

Coach hit my value screen this past weekend. It passed on 9 of 13 fundamental and technical factors. However there were four negatives that kept me out of this equity:

1. 20d EMA is quite negative currently.
2. The Put/Call ratio is slightly bearish.
3. They have rising year over year inventories and receivables.
4. Finally, the Graham Number pops out a valuation of $24 per share. Ouch!

Member Avatar Gibybo (94.50) Submitted: 2/26/2013 12:34:49 AM
Recs: 1

1. I don't believe there is any positive correlation between 20day EMA and a stock's future value, but I would be happy to see evidence that there is.
2. This may imply the market believes a negative outcome more likely than a positive one, but it doesn't imply that the EV of the stock is negative (i.e. a positive outcome is likely to be larger in magnitude than a negative one), and in a reasonably well diversified portfolio, EV is all that matters.
3. It seems to be roughly inline with their increase in sales year over year, so I'm not sure this is much of a concern.
4. Yes, this might make it difficult for it to qualify as a value stock, but my (possibly naive) thinking is that they have a lot of brand value that is not accounted for in their earnings (due to a temporary lack of consumer confidence) or in their book value.

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