A Value Play in the Apparel Industry: Coach, Inc. (COH), Ralph Lauren Corp (RL), Michael Kors Holdings Ltd (KORS)

But the shares of Michael Kors have appreciated by nearly 32% over the last year, and at the CMP, its shares appear to be overvalued. Moreover, Coach, Inc. (NYSE:COH) enjoys better margins and carries a modest yield.

Ralph Lauren Corp (NYSE:RL) loses out due to an expensive valuation, and significantly lower net margins. Its gross margin is greater than Kors, but its low net margin indicates an expensive operating business structure.

Conclusion

Although shares of Coach have lost nearly 33% of their value over the last year, I believe that there’s a significant upside potential in the stock. Of course, risk-averse investors should buy Michael Kors Holdings Ltd (NYSE:KORS), but as a contrarian play, Coach seems to be a great stock due to all the mentioned reasons.

The article A Value Play in the Apparel Industry originally appeared on Fool.com and is written by  Piyush Arora.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.