Trade-Ideas: Coach (COH) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Coach ( COH) as a post-market leader 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 $168.9 million.
  • COH is up 2.1% today from today's close.

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More details on COH:

Coach, Inc. provides luxury accessories and lifestyle collections for women and men in the United States and internationally. The stock currently has a dividend yield of 3.8%. COH has a PE ratio of 21. Currently there are 8 analysts that rate Coach a buy, 4 analysts rate it a sell, and 11 rate it a hold.

The average volume for Coach has been 3.7 million shares per day over the past 30 days. Coach has a market cap of $9.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.63 and a short float of 6.7% with 4.00 days to cover. Shares are down 4.5% year-to-date as of the close of trading on Wednesday.

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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, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The gross profit margin for COACH INC is currently very high, coming in at 76.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.48% trails the industry average.
  • Net operating cash flow has significantly increased by 59.44% to $167.20 million when compared to the same quarter last year. Despite an increase in cash flow of 59.44%, COACH INC is still growing at a significantly lower rate than the industry average of 133.22%.
  • COACH INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, COACH INC reported lower earnings of $2.78 versus $3.62 in the prior year. For the next year, the market is expecting a contraction of 31.3% in earnings ($1.91 versus $2.78).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 53.8% when compared to the same quarter one year ago, falling from $190.74 million to $88.10 million.

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