Put Me in Coach!

Quick Thesis: Coach, Inc. (NYSE: COH) is solid free cash flow story which many investors have overlooked as they focus on the newly public (and faster growing) Michael Kors (NYSE: KORS). The primary concern is that sales will continue to decline and the multiple contraction at Coach will not be short lived as KORS takes share. While KORS trades a premium multiple and is priced for perfection, COH has been left for dead. The stock sits 36% below its 52 week high after missing 2nd quarter earnings on slowing sales. Current multiples make COH a compelling “value” story – with a market cap of $14.4 billion and trading at 13.6x and 8.1x consensus EPS and EBITDA
estimates, respectively, the stock trades at historically low levels. Continue reading

Down So Long it Looks Up – Zipcar

Case closed. I first wrote about Zipcar (ZIP) on April 19, 2011 when the stock traded north of $26. Then I revisited the stock in July of 2011 when the stock was trading at $22.51 (after having touched $19.35). In the post, I stated that “While I would applaud the fact that the underwriters’ analysts came out of the gates with “Neutral” ratings. I don’t think they went far enough”. Today, almost 18 months later, this hit the wires: “Avis Budget Group to Acquire Zipcar for $12.25 Per Share in Cash”. The companies involved touted the deal for its “49% premium over the closing price on December 31, 2012”; however, the release failed to mention that ZIP went public less than two years earlier at a price of $18. By my math, that means the take-out price was 31.9% BELOW the IPO price. Not to mention, the stock had a bubblicious IPO stock pop and opened up at $30 – this means the average investor is down far more than 32%. If you shorted the stock when I first wrote about it, you gave back some of your gains with today’s pop, but you’re still up over 53% (I would hope you took gains long ago – pigs get slaughtered!). What happened? Continue reading

12 Things You Should Know Before Buying BJ’s Restaurants in 2012

I’m baaaaaack, happy New Year! Presented without graphics. I have been watching BJ’s Restaurants, Inc. for several months to see if the stock would fall from its Icarus like heights. The short story is that during the time I was on the sidelines, it has yet to come back to a level that seems more “attractive” to my somewhat trained investment eye. For my first post of 2012, I present to you my top 12 reasons why you would be better served to buy one of the menu items before buying the stock: Continue reading