Coach (COH) is the first Online Stock Study at the Better Investing website and the recorded session can be viewed and listened to by any BI member with a media player. It was held last December but, because of some technical problems, was just recently uploaded to the BI website.
Here’s BI’s consensus SSG compared with Take Stock and my SSGs:
|
COACH
(COH)
|
BI Online Stock Study
|
Take
Stock-1
|
Take
Stock-2
|
Armin-1
|
Armin-2
|
|
Date
|
12-04-07
|
9-3-07
|
3-23-08
|
8-31-07
|
3-20-08
|
|
Price
|
$35.74
|
$41.53
|
$29.89
|
$44.53
|
$29.89
|
|
|
|
Sales Growth
|
18.00
|
20.00%
|
same
|
17.00%
|
|
|
EPS Growth
|
13.40%
|
16.31%
|
same
|
17.00%
|
13.00%
|
|
High PE
|
24.5
|
28.5
|
same
|
29.0
|
23.0
|
|
High Price
|
$82.10
|
$102.28
|
$102.28
|
$107.60
|
$81.00
|
|
Value Line
High Price
|
$65-100
|
$70-110
|
$70-105
|
$70-110
|
$70-105
|
|
Low PE
|
11.6
|
12.1
|
same
|
14.8
|
11.7
|
|
Low Price
|
$25.20
recent severe market low
|
$21.18
|
$22.39
|
$25.00
growth comp option
|
$18.50
20% < 52 week low
|
|
Up/Down
|
4.4
|
2.47
[imputed]
|
9.7
[imputed]
|
3.2
|
4.5
|
|
Total Return
|
18.1%
|
18.1%
|
27.9%
|
19.3%
|
22.1%
|
|
Data
|
S&P
|
Hemscott
|
Hemscott
|
S&P
|
S&P
|
|
|
|
PTPM-5 yr ave
|
34.7%
trend up
|
[deleted]
|
33.9%
trend N/A
|
[deleted]
|
34.7%
trend up
|
|
ROE-5 yr ave
(end equity)
|
34.9%
trend down
|
N/A
|
N/A
|
[deleted]
|
34.9%
trend down
|
|
ROE-5yr ave
(begin equity)
|
51.6%
trend down
|
[deleted]
|
51.9%
trend N/A
|
[deleted]
|
51.6%
trend up
|
Comments:
- COH’s price has continued to plummet from $44.53 when I did SSG-1 on 8-31-07 (and posted it here on Stock Central) to $29.89 for SSG-2 on 3-20-08, a drop of 33%. Google Finance shows that COH has fallen 38% in the last 6 months and 41% in the last 12;
- Analysts are currently estimating EPS for the next 5 years at around 18-19% with S&P low at 17.50% and Value Line high at 22.00% with FactSet CallStreet and Reuters at 18.00% and 18.20%, and Zacks at 19.00%. Take Stock (TS) estimated 16.31%;
- Neither VL nor TS changed their EPS estimates despite COH’s declining price whereas S&P did, lowering its estimate from 20.00 to 17.50%. Because none of Take Stock’s judgments changed, its 27.9% Total Return and 9.7 Upside/Downside Ratio (which I calculated) were the highest of the five analyses;
- I lowered my judgments substantially: EPS from 17.00% to 13.00% and High & Low PEs from 29.0 & 14.8 to 23.0 & 11.7. Because of COH’s super-steep price drop, my SSG-2 actually increased its Upside/Downside Ratio and Total Return;
- Note that average ROE for the past 5 years changed its number and trend when beginning equity was used instead of ending equity.
Questions:
- Do you think a consensus voted-on estimate is useful to decide SSG judgments (which the BI Stock Study used to decide its forecast Sales, EPS, High & Low PEs)?
- Do you think an average estimate is useful which the BI Study used to shape its consensus choices (e.g., average of 4 different Sales estimates, 5 different High & Low PEs)?
- Do you think its better to use ending equity (the TK5 default) or beginning equity (Alt-R) to determine the average ROE for the past 5 years and its trend?
Final Thoughts:
- I urge that BI members review all 5 of the Online Stock Studies now at the Better Investing website: Coach (COH), Staples (SPLS), Proctor & Gamble (PL), Colgate-Palmolive (CP), and CVS Caremark (CVS). The COH Study is summarized in the April 2008 issue of Better Investing magazine, but that is way not as thorough nor as interesting as the audio-visual presentation.
Armin |