OT: COH. I remain long a few shares. Net profit margins holding up well. Relatively little d/e. As a premium clothing-related status symbol, company could be an acquisition target for the likes of LVMH or other high-end company. Not a concern if someone is long -- It's something though that always has to be kept in mind if shorting a stock, since acquirers sometimes base buys on presumed strategic value of a company, not just the targets's short-term outlook.
As long as desire for product is there, I'll bet enough women will find a way to acquire it. Maybe it's less of something else, or less expensive something else (less expensive dresses/coats). With the splurge for the purse.
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For a clothing short, I was going to suggest The Gap, GPS. That's down today though. I view Gap opposite from COH in terms of quality of merchandise: COH high quality, GAP poor quality. I shorted a few shares when they said they were closing many USA stores and opening up more in China. I don't see how that would necessarily give them improving profits. (For tax reason, I didn't want to carry the position over into 2012, so I bought back shares too early. I may reconsider re-shorting in about a month (to avoid USA tax wash-sale rule.))
Shorting COH could work as a trade to scalp a few points as market moves around and reports circulate on how consumers will stop or have stopped consuming. Longer-term though, I wonder.
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From Jake Straw: COH mentioned:
Message 27641468 |
