Don't Be Left Holding The Bag: A Kate Spade, Michael Kors Pair Trade
- Women's fashion is a fickle business (this is a good thing for those that seek to understand the ebb and flow of art/style and more relevantly FOMO/envy culture).
- Last year, Coach traded at a >100% premium to Michael Kors -- since that time, KORS has usurped dominance in the eyes of the market.
- ... now trading at a remarkable >60% premium to Coach.
- I am now recommending a long Kate Spade -- short KORS pair trade until the market cap differential converges, at least from a 4:1 to 2:1 ratio.
- ... a 100% upside in KATE; 50% downside in KORS -- or until KORS buys KATE.