'Fast Money' noted yesterday that major COH shorts have covered. That's a nice sign that we are hopefully near a bottom. Like I've said, I'm in with 3K shares $40, so I'm very hopeful. I'm not comfortable though. If they guide down, we're going to get killed after that CC next wednesday. All I see though are people in new BMWs and Mercedes, so I'm guessing some people are buying things.
I also believe in time we will be back to the highs. I'd like to see us in the $30s though. The $1BB buyback takes more than 10% of the shares off of the table. As there COH is 91%owned by institutions, that leaves a lot less supply out there. I just wish I had more to play. I belive now is the time.
anyone with common sense is going to be comfortable with COH next earnings call 23rd IMO BUT the market is tough all over right now. Pavlovian recitation over and over of irrational negativity has made the market paranoid - to say the least - and they are forgetting what makes a solid company. Dollars and sense. And COH has plenty of both.
Like I said in a previous post, COH got hammered for all the wrong reasons. Oh, the signs are there - for consumer confidence polls gone downward, mortage crisis on 5% of the loans out there, credit crunch (see my example below of what I think of that), flat mfr. growth.
But no one balances that with Japan's GDP at a decent 1.7 (COH has stores there, yes?)and ours at 1.2 last report; no one sees that jobless claims were the lowest in three months today; no one sees that Wells Fargo hit their 41 cents per share est yesterday (the financial markets are totally destroyed - aren't they? that's what I read) on record revenues, no one sees the weak dollar and the boon that is going to be to businesses in the U.S. that export; all they see is the credit crunch and consumer confidence that is going to kill, in this case, COH.
The logic being, in this fictional example: Earl over at the trailer park isn't going to be able to get that second mortgage on his double-wide so his wife, Jaylene, won't be able to buy anymore COH bags.
I mean, that's how ridiculous the logic is being applied to why one shouldn't buy COH right now.
Which is why I am buying at this level. The hell with anyone else. THe math is still $2.06 FY2008 x a healthy 25PE (when the market rebounds, and it will - it always does)= north of $50 per share.