Sunday, January 27, 2013

"I saw that Coach had a little bit of an off quarter and I started wondering why. It may be because of the rise of their competitor Michael Kors Holdings Ltd."

Dow Jones Industrial Average 13,895.98 (UP ) Week ending 01-25-2013

Headline: "Coach Inc. was profitable and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. "

I saw this headline last week and I started wondering if this was some kind of symptom of some new competition to their business?, or just a blip on the radar. I started looking around at companies in their space and came upon "MK"

..... a thinking Michael Kors

Michael Kors Holdings LTD. (Symbol KORS, $58.08) is a company on the move. It fits well within my investment criteria with a PEG ratio of 0.67 and a Return on Equity of 33.26. These are my guidelines to judge price safety compared to growth and return on the money they are investing as a measure of financial health of the company.

I checked out KORS in the IBD paper and it had a SmartSelect rating number of "99", which is as good as it gets. Smartmoney says that there are 12 analyst with a"buy" recommendations on the stock.

Michael Kors is projecting 2013 earnings per share of $1.58 per share and 2014 earnings of $2.04.
The revenue has increased in all 3 quarters that this stock has reported, so maybe you can get in early on this stock's rise. I am always looking for the next "Ralph Lauren", which has performed great over the last 3 years.

The long term earnings on KORS is projecting out at 52.25%.
The 12 month Return on the stock is 94.57% , so if you were in,  you doubled your money. 

I would say that you can pick this one up anywhere along the way here. It may correct, but certainly would bounce back quickly.

Today is my 59th Birthday. I looked out the window where I write my blog this morning and saw a beautiful Red Fox sitting around by my bird feeder. Then he headed for the creek down below our yard.  Funny to see him in full daylight, but I think he was coming to wish me a Happy Birthday! 


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