Coach ( COH) Company profile: Coach makes high-quality, brand-name goods, including handbags, leather accessories, business cases, footwear, jewelry, sunwear, travel bags, watches and fragrance products. It's seeing huge sales growth in China and Japan. Handbags sell for up to $420. Share performance: up 16.6% in the past three months; 12% in 2011; three-year average annual return of 43%. Investor takeaway: Morningstar analyst Paul Swinand wrote that, "even during the challenges of the recession, Coach's fundamentals were excellent, with three-year historical operating margins above 30% and returns on capital around 40%." Free cash flow generation also has been high, historically greater than 20% of revenue. S&P Capital IQ has it rated "strong buy" with five stars, its highest rating. It gives its shares a $77 price target, a 23% premium.