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Nick Clayton

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  • A Purse Or Wallet For Your Portfolio - Try Coach, Inc. [View article]
    Thank you for your comment Frrizzo380. I agree that the luxury goods industry does not support the favorable business economics of the consumer goods industry. Just about everyone has shopped at Wal-Mart, tasted a Coke or Hershey Bar or used Old Spice, Gillette, or Crest toothpaste (Proctor & Gamble products). These are the kinds of companies that Warren Buffett buys because they have an essential piece in the consumer's mind. I think Coach has a narrow moat because they definitely have built a strong emotional connection with their consumers. One could make an argument that it is impossible to build a wide moat in the luxury goods industry. However, I think because Coach does not carry a lot of debt and because they have shown a consistent ability to increase free cash flows and earnings, they will be able to defend their narrow moat and stay afloat during economic recessions.
    Mar 20 12:43 PM | 1 Like Like |Link to Comment
  • A Purse Or Wallet For Your Portfolio - Try Coach, Inc. [View article]
    I should clarify that I believe Coach has a narrow moat. They definitely do not have a wide moat like say Wal-Mart, Proctor & Gamble, Oracle, or Microsoft. Wal-Mart is a low cost producer that benefits from huge economies of scale while software giants Oracle and Microsoft benefit from high switching costs. I think Coach has carved out a narrow moat because of their brand. Customers are willing to pay a little more for the name. However, competitors like Michael Kors or Kate Spade could erode Coach's moat and eat away at its profit margins if management does not continue to invest in marketing initiatives or does not diversify its product line.
    Mar 20 12:26 PM | 1 Like Like |Link to Comment
  • A Purse Or Wallet For Your Portfolio - Try Coach, Inc. [View article]
    Thank you for your comment AnAvgJoe. I agree KORS has come on strong as of late. However, given Coach's consistent cash generating ability and management's capital allocation decisions, I believe it is a great opportunity to buy Coach on the cheap. I definitely think Coach is entering a maturity stage where it will see its cash start to pile up. Expect increased dividends and share buybacks. KORS will definitely chip away at Coach's margins, but I think right now its price multiples make KORS a less attractive growth play.
    Mar 19 03:16 PM | 2 Likes Like |Link to Comment
  • Cal-Maine Foods: A Morning Delight For Your Portfolio [View article]
    Agreed. Investors must be willing to stomach periodic fluctuations in the market price. That being said, Cal-Maine has a dominant market share, is expanding its customer base and management has delivered strong returns for the last few years. Investors must be willing to buy and hold for the long run. It will pay off!
    May 10 01:23 AM | Likes Like |Link to Comment
  • Confessions Of A Value Addict: My Next Fix? Universal Corp. [View article]
    You are most certainly welcome! I enjoy finding undervalued companies with sustainable competitive advantages that have stood the test of time. I am glad you decided to keep them. I think it will pay off for you.
    May 7 11:25 PM | 1 Like Like |Link to Comment
  • Cooper Tire & Rubber Co.: Should Investors Load Up Or Tread Carefully? [View article]
    Great analysis! After running my numbers using your projections, I have the stock valued at $47.56. I used owner's earnings so that is most likely why our fair values differ slightly. I always prefer to invest in companies that are easy to understand. I will definitely be looking closer at Cooper Tire. Thanks for the knowledge!
    May 6 04:21 PM | Likes Like |Link to Comment
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