COH - Ready to pull the trigger yet?

[maxedout]

EPS 1.98
EPS Rate 19%
PE 38
Future EPS 11.28
Future stock price 428.47
Sticker Price 105.91
Current Price 35.24
MOS 52.96
Historic High 53.97
Also featured on Mad Money as an undervalued buy.

Bullish or Bearish?

[danno]

I like coach but fear the old adage of who is going to buy Pricey Handbags in hard financial times. That aside I see them everywhere and it appears all woman want them.

I'm curious about the future PE though. I assume you used two times the EPS growth rate to get 38? That seems lofty to me as the historical PE is 25. Using the historical and a more modest growth rate of 18% I got the MOS at $32.

I'm thinking about buying if it drops back more. Anyone else got input? And where is NPG haven't seen him post in a while?

[bovverd]

You have to be looking to really lowball future growth rate projections during economic downturns as the growth experienced in recent years is almost certain to deteriorate from those previous highs.

Thats why predicting growth is a dangerous game. The economic climate can change, sales can change and earnings can change making your initial calculations for sticker prices and margins of safety way out from your original projections.

The problem I have with Rule 1 is that it is supposedly a derivative of the Buffett and Graham approach but if you use it you never stumble across any of Buffetts business's!! Where is Carmax, Kraft, Coke, Burlington, Wells Fargo, Moody's Walmart etc on any of the rule 1 'screens' ??

Buffett will buy anything that is reasonably sized, reasonably priced, with a competitve advantage thats easy to understand which has good management who behave like owners. So on the basis he doesnt own the likes of COH or Cake or Apple must mean either hes not spotted them or they do not comply!

[maxedout]

Originally Posted by bovverd

You have to be looking to really lowball future growth rate projections during economic downturns as the growth experienced in recent years is almost certain to deteriorate from those previous highs.

Thats why predicting growth is a dangerous game. The economic climate can change, sales can change and earnings can change making your initial calculations for sticker prices and margins of safety way out from your original projections.

The problem I have with Rule 1 is that it is supposedly a derivative of the Buffett and Graham approach but if you use it you never stumble across any of Buffetts business's!! Where is Carmax, Kraft, Coke, Burlington, Wells Fargo, Moody's Walmart etc on any of the rule 1 'screens' ??

Buffett will buy anything that is reasonably sized, reasonably priced, with a competitve advantage thats easy to understand which has good management who behave like owners. So on the basis he doesnt own the likes of COH or Cake or Apple must mean either hes not spotted them or they do not comply!

I use rule one as my base.
I then compare the numbers to IBD-Vectorvest-Navellier-and several others. After that I run it by Jim Cramer.
This is the edge I found works best for me.
Attack it from 360 degrees with as many comparisons as possible.
Check the jockey -10K Letters etc.
Pull the trigger then ring the register at 20%.

[The Prince]

Hi Maxed Out.
Read This:
Sticker Price is 34$!
It's Currently on 31$.
No Big Enough margin altough It has a good Moat
Look for other Oppurtunities

[maxedout]

Thanks!
I will

[Stockowner]

Good points bovverd.

So on the basis he doesnt own the likes of COH or Cake or Apple must mean either hes not spotted them or they do not comply!

In regards to Apple, he doesn't know how the company will look in 10 or 15 years.

[Gunnski]

COH

I have a MOS @ $30.68. Currently trading @ $31.13. I used the numbers from MSN Finance. Current EPS 1.98, Growth rate of 17.5 & Historical PE of 25. I then did the input on the calculator @ Phil Town's web site.

Rueters had huge numbers posted for historical 10 & 5 year, some up in the 40's. I think it would be tough for most biz's to maintain such lofty numbers over time. After shaking everything out, I think a Growth rate of 18 is very resonable.

I checked S&P & Rueters via my Scottrade acct. Both have glowing reports & sterling Key Ratios for COH. S&P rated it 5* which is very powerful.

I am not a fan of retail stocks but this is one I will continue to follow. If it drops a touch more, the price may be just right. Projections are for it to rise back up to the 50's. We'll see!

[The Prince]

Hi guys.
Iv'e noticed some near amazing diffrences between your sticker and mine.
my sticker price us 34$ while some here have a sticker price of above 100$! so i checked things out and found out the reason: eps on msn is too high than the actual eps.
Why 1.98 EPS On msnmoney you ask?
because it's YTD. In a YTD they take the last 4 quarters rather than the last year. so when you want to run phil's town model, you need to take the ->financial results->10 year summary and take the eps from there and all of the profit data from there.

if you do that calculation, you'll find out that while coh has great numbers, great moat, and great manegment, the risk you take is very large as far as margins are concerned, and rather too risky for rule #1 investment.

Think it through

[Gunnski]

If you use a system like Rule 1. I feel you need to follow the basic rules. The book clearly says "current EPS". Pg. 148-149.