Monday, December 28, 2015

Coach Longer Term Drivers Up Against Near-Term Macro Issues, $coh, #in

*Giftables and low price goods should be a real driver for Coach.

*That said, warm weather, promotions, weak traffic may fog all the benefits that Coach is implementing.

*An investor for the long term should be aware that this quarter FQ2 has real impacts that may make the story seem less favorable.

*If there is weakness for Coach in holiday sales, we do not think it's a sign that the turnaround has stalled and would be a buyer on weakness.


Coach (NYSE:COH) likely reports earnings at the end of January.
As we all know Coach is in the process of a turnaround. While we worry about the fourth quarter given macro themes, we think the turnaround is still likely successful. To own it for holiday means that regardless of what happens, an investor needs the will to hold it even if holiday is bad. If they can't handle that potential volatility then they should probably wait or have dry powder to buy after holiday reports come out.



Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts.

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