Trade-Ideas LLC identified

Coach

(

COH

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Coach as such a stock due to the following factors:

  • COH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $184.6 million.
  • COH has traded 256,757 shares today.
  • COH is up 8% today.
  • COH was down 6.4% yesterday.

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More details on COH:

Coach, Inc. provides luxury accessories and lifestyle collections in the United States. The stock currently has a dividend yield of 4.2%. COH has a PE ratio of 24. Currently there are 12 analysts that rate Coach a buy, 1 analyst rates it a sell, and 10 rate it a hold.

TheStreet Recommends

The average volume for Coach has been 4.8 million shares per day over the past 30 days. Coach has a market cap of $9.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.67 and a short float of 5.8% with 2.88 days to cover. Shares are down 0.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Coach as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that COH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.03 is high and demonstrates strong liquidity.
  • The gross profit margin for COACH INC is currently very high, coming in at 72.97%. Regardless of COH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.35% trails the industry average.
  • Net operating cash flow has significantly decreased to $8.00 million or 94.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Textiles, Apparel & Luxury Goods industry average. The net income has decreased by 19.1% when compared to the same quarter one year ago, dropping from $119.10 million to $96.40 million.

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