• J Mintzmyer
    Great buying opportunity today with $COH.
    7/30/13
    Reply (34)
    • jameskuwe: bot some coh at $53. its a knee jerk reaction
      7/30/13
    • jameskuwe: the drop of coh price is a knee jerk reaction. price has stabilized now
      7/30/13
    • J Mintzmyer: Yeah-- I'm in cash accumulation mode until after $LNKD and $TSLA report. If $COH is still low $50s, I'll double my position.
      7/30/13
    • J Mintzmyer: I opened around 6m ago around $50.
      7/30/13
    • Schneij: I sold 4 $52.5 put contracts this morning and got $3.20 per. I'd be happy with the money or owning coach at $49.30
      7/30/13
    • J Mintzmyer: Puts for? Jan 14?
      7/30/13
    • J Mintzmyer: Similar approach, but I'd rather long the stock and sell covered calls at $55 strike. Less margin requirements w/ similar guaranteed yield.
      7/30/13
    • Schneij: Nov. I make sure my annualized return on the money is 20% at a min.
      7/30/13
    • J Mintzmyer: Unless you take delivery. Not a bad price for Novs though. I never sell puts. Too much opportunity cost on my buying power.
      7/30/13
    • Schneij: Normally won't go further than 1-2 month strikes to get expiration before earnings. But the Ann ret was 20%, so I'll take that trade any day
      7/30/13
    • Schneij: Owned it since $50 earlier this year, been selling covered calls at $60 against it until this morning.
      7/30/13
    • J Mintzmyer: True- that's been one of my key points to buying $ACIIQ and writing calls, massive annual returns. Congrats on the great covered calls ($60s).
      7/30/13
    • Schneij: My DCF puts the fair value at $61-$63. Lots of areas it can grow: mens, international, supply chain. Lot of volatility, but a well run comp
      7/30/13
    • jameskuwe: looking forward to it being bumped up today
      7/31/13
    • Stan Ackman: Even if Coach's fair value is $61, the potential return now is only around 15%, which is too low to justify a buy.
      7/31/13
    • J Mintzmyer: I said the same thing as Stan back when $WMT was at $50 (and I wrote an article on SA recommending a buy late Jul 11!), "only a 20% upside."
      7/31/13
    • J Mintzmyer: That "only 20%" kept me from investing in $WMT. Huge mistake in hindsight, got greedy and invested in risky growth and turnaround prospects.
      7/31/13
    • Schneij: My DCF assumes 8% growth for 10 years and than 4% after. This can happen through store expansion.
      7/31/13
    • Schneij: If can get rev growth like they had at 14%+, then I'll revisit my target. I think it's 75/25 they can get back to old growth numbers
      7/31/13
    • J Mintzmyer: I think 8% is feasible and maybe 4-6% after, seems very realistic, conservatively. Are you accounting for continual share repurchases?
      7/31/13
    • Schneij: No, I discounted FCF and kept the same FCF as % of revenue constant, so repurchases don't affect the calculation
      7/31/13
    • J Mintzmyer: Right, but how did you divide the future FCF? By current outstanding shares? Could have a huge impact if market stays weak for $COH.
      7/31/13
    • J Mintzmyer: In other words your $61-$63 is ultra conservative based on combination of low revenue growth, low capex needs, and projected return of FCF.
      7/31/13
    • Schneij: Yes to current shares. I relevered their beta at 1.6, so the Disc Rate is 11%+. I have CAPEX @ 3.9% of Rev, < than their 5 yr of 4.5%
      7/31/13
    • Schneij: I think the 8% rev growth is the middle ground for the next 10 years, and 4% conservative on the outlying years.
      7/31/13
    • J Mintzmyer: Wish $COH would have sold $1-$2B in debt when the rates were nice and did a heavy buyback. No debt in this environment is bad CoFi move.
      7/31/13
    • J Mintzmyer: On that note rates are still nice. Sell $1B of debt, let the market tank the equity to $40, and buyback hand over fist. $SWY did this.
      7/31/13
    • Schneij: Be careful with grocers.I work in FMCG and most have 0 growth potential. KR is the only one growing outside of $ stores.
      7/31/13
    • Schneij: They can increase margins and do buybacks, but they don't have Rev growth potential outside of organic. But makes it a great trading vehicle
      7/31/13
    • J Mintzmyer: I called $SWY as a long last summer, but unfortunately didn't deploy for the same reason I skipped $WMT in late 2011. Same missed opp.
      7/31/13
    • J Mintzmyer: Re: leveraging, if you have confidence in biz, zero debt is stupid. All retailers seem to do it. Kills the WACC. No excuse with these rates!
      7/31/13
    • J Mintzmyer: It only makes sense for a company like $GME. They bought back debt to improve their perception in the market instead of only buybacks.
      7/31/13
    • J Mintzmyer: $INTC $MSFT $AAPL figured it out. Should sell max amounts of debt at those rates as long as i/r is fixed and future OCF covers maturities.
      7/31/13
    • Schneij: Agreed, I never hate a company that increase debt to buy back shares. Improved WACC is fine by me!
      7/31/13