Coach Crushes It
It has been a poor start to the third-quarter earnings seasons so far. Although the majority of firms have reported results that have beaten on the bottom line, just over 40% of S&P 500 companies are beating revenue estimates. In addition, forward guidance has been dismal. There are other concerns in the market -- the fiscal cliff, Europe and so on -- but Tuesday's rout in equities was primarily driven by earnings reports and guidance that have disappointed investors. I think this will continue throughout the quarter.
I used Tuesday's broad selloff to add to my position in Coach (COH), which I have owned since earlier this year, when the stock plunged to around $50 on weakness in the retailer's metrics. My investment thesis is as follows. First, the company provided a lot of data points in its earnings report Tuesday that should make investors happy (see below). Second, the valuations are still reasonable. In addition, the company's growth in Asia is still in the early innings....288 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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