Trade-Ideas: Coach (COH) Is Today's Unusual Social Activity Stock

Trade-Ideas LLC identified Coach ( COH) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Coach as such a stock due to the following factors:

  • COH has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 6.39 mentions/day.
  • COH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $188.8 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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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 3.1%. COH has a PE ratio of 31. Currently there are 12 analysts that rate Coach a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Coach has been 3.5 million shares per day over the past 30 days. Coach has a market cap of $11.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.55 and a short float of 5.2% with 3.15 days to cover. Shares are up 31.7% 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • COH's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, COH has a quick ratio of 2.11, which demonstrates the ability of the company to cover short-term liquidity needs.
  • COACH INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COACH INC reported lower earnings of $1.45 versus $2.78 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.45).
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 38.60% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, COACH INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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