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Nitin Gulati  

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  • Should We Care Why The Stocks We Buy Are Cheap? [View article]
    Geoff
    Unfailingly , as an investors, we run into cheap stocks and most of the times their cheap valuation is justified. As you stated as well in your piece, investors should approach value investing with expectation to find warts, and attempt to connect the dots from there. And repeatedly, by connecting these dots, you can put into perspective " Mr. Market's disappointment with the stock.
    But the real work starts after this, judging likely outcomes , and bench-marking it against market's expectations.
    Sep 2, 2015. 08:51 AM | Likes Like |Link to Comment
  • Indicators Of A Good Business [View article]
    A perfect example to illustrate this would be the capital spending corporations are pursuing to grow their omni-channel. They are funding this growth through cash that continues to roll in through their operations but are curtailing their store expansion plans and some are even rationalizing their footprint. In the long-term they are building to re-position themselves to align with consumer preferences, but with higher margin potential.
    Aug 31, 2015. 01:40 PM | Likes Like |Link to Comment
  • Vince Holdings: Too Uncomfortable To Own; Hence, We're Long [View article]
    You need patience to hold it through vagaries of the market. If you hadn't bought it earlier, sure enough it has gotten cheaper
    Aug 23, 2015. 07:53 PM | Likes Like |Link to Comment
  • Michael Kors - Risk Means More Things Can Happen Than Will Happen [View article]
    Champ1

    Given that vols are high on this name, you can at-least start selling calls against you position, to reduce your cost basis. Send me a pvt message , and I should be able to walk you through
    Jul 15, 2015. 06:47 AM | Likes Like |Link to Comment
  • Michael Kors - Risk Means More Things Can Happen Than Will Happen [View article]
    Yes they could raise debt to buyback shares and trust me if panic hits the overall market , unjustified selling will trump rationality .
    KORS is a decent business but broader macro risks limit upside , if any
    Jul 14, 2015. 12:12 PM | Likes Like |Link to Comment
  • Michael Kors - Risk Means More Things Can Happen Than Will Happen [View article]
    I'm not disputing KORS business, it will continue to generate tons of FCF but it wouldn't be as much as expected. Given how macro conditions are panning out, we will be able to buy it at cheaper prices. Unfortunately it's not at the levels yet where it turns a no brainer for me. I closed my Long COH as well.
    I m in no way disputing your knowledge of the industry but only opining that there's one more flush coming in and till then I will wait with my short
    Jul 14, 2015. 12:09 PM | 1 Like Like |Link to Comment
  • Michael Kors - Risk Means More Things Can Happen Than Will Happen [View article]
    Jonah

    There are multiple issues, in my opinion, difficult laps from last year. Aggressive discounting , and remnants of growth expectations. I can't stress enough the phenomena of "normalization", and as it takes hold, expectations will diminish further.

    I agree the company will continue to generate enough FCF, but not as much as widely believed.

    Last, but not the least, if markets begin to turn bearish, which I believe is very likely, questions will be asked after the selling has consummated for growth stocks.

    Jul 14, 2015. 09:32 AM | 2 Likes Like |Link to Comment
  • Michael Kors - Risk Means More Things Can Happen Than Will Happen [View article]
    Stan,

    Good to connect with you again. As you are aware , I manage my risk in a very nimble manner and KORS isn't any different.

    While it isn't surprising that KORS stock fell under its own weight as there was a time not too long ago when analyst community and contributor community here at SA were recommending this stock at nearly $100 levels.
    Yes, I agree KORS took market-share away from COH, but that's it, I believe KORS is on the same path on diluting its brand.
    Only a fool learns from his own mistakes. The wise man learns from the mistakes of others. And if, KORS management couldn't learn from mistakes of COH, there is a strong likelihood of them repeating the same mistakes as well ( In reference to aggressive expansion strategy)

    Let me ask you this " Is KORS fairly valued at this level or under-valued"

    Invariably, the disposable income of their end customers has gone up along with the broader markets , and if there is a steep correction, which is very likely going to happen soon, how are you accounting for that.

    Basing opinion purely on drop in price equating to a value play has a lot of flaws in my opinions , and essentially, that's what I intend to capitalize from.
    Jul 14, 2015. 09:23 AM | 1 Like Like |Link to Comment
  • Coach Should Trade Down 50% From Current Levels [View article]
    Josh,

    I have written a lot on COH over the past one year here at SA , arguing stock as a strong buy especially after the last year analyst day fiasco. My underlying thesis primarily was built on the premise that with the stock in free fall last year, investors are essentially overlooking the downside risks emanating in KORS, which unfolded as I hoped. At that time I recognized the strategic blunders COH's management made , giving in market share to rival entrants but argued valuation turning reasonably attractive. Although, we all hold our opinions when it comes to investing in companies, but I would be more interested in listening to what your estimate of earnings power for COH & KORS.
    Jul 6, 2015. 02:13 PM | Likes Like |Link to Comment
  • 'When Facts Change, I Change My Mind': Coming Around On Chipotle [View article]
    For something out in next 20 years, would you the price now that's the question.
    Jun 20, 2015. 06:11 PM | Likes Like |Link to Comment
  • 'When Facts Change, I Change My Mind': Coming Around On Chipotle [View article]
    3000-3500 store count opportunity was laid out by management , and if you believe opportunity is much bigger than this , obviously you know something which management doesn't. I clearly laid out "Thus, the market is valuing Chipotle's brand extensions Shophouse and Pizzeria Locale between $7.5 billion to $9.1 billion". And if you are willing to pay that much for a concept that hasn't even taken off the ground , you definitely can , but i suspect if it will be a profitable endeavor for you
    Jun 20, 2015. 10:37 AM | Likes Like |Link to Comment
  • 'When Facts Change, I Change My Mind': Coming Around On Chipotle [View article]
    Don't ignore investors get over-excited on upside and panic on downside. This short will turn into good winner, but needs patience- a risk I am willing to take in current market scenario.
    Jun 17, 2015. 06:46 PM | Likes Like |Link to Comment
  • 'When Facts Change, I Change My Mind': Coming Around On Chipotle [View article]
    But don't forget unit economics , capex requirement is creeping up, if comp growth slows, only alternative is to jack up the prices again. But raising prices could turn consumers away given there is now cost to switch for consumer.
    Jun 17, 2015. 08:27 AM | Likes Like |Link to Comment
  • Pier 1 Imports - Deep Value Stock Poised To Outperform Williams-Sonoma [View article]
    I think its a circular argument : Growth is slow hence capital is excessive but if we invest , investment community will invariably punish the stock for short -term depression in margins because street unfortunately holds a myopic view.

    While I can see your argument on paying excess capital back to shareholders via a special dividend payment, but given the sentiment around the stock, I can easily someone making the case for expanding the buybacks.
    Jun 15, 2015. 07:34 PM | Likes Like |Link to Comment
  • Pier 1 Imports - Deep Value Stock Poised To Outperform Williams-Sonoma [View article]
    I should have included FCF but nevertheless I think I clearly laid out my thesis on it. One can argue buybacks are a financial gimmicks, but buying back share at the undervalued levels is accretive for the shareholders, and that is a reality which can't be dismissed.
    Jun 15, 2015. 06:07 PM | Likes Like |Link to Comment
COMMENTS STATS
447 Comments
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