Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Coach, Inc. (COH): This Fashion Designer Is Cheap, But Should You Jump In?

Alternatives: Ralph Lauren and Michael Kors

There are several alternatives to Coach, and they represent a wide range of growth and stability.

Ralph Lauren Corp (NYSE:RL) is on the “stability” end of the spectrum. The company offers a complete product line, and has its largest growth opportunity in international markets, with just 37% of the company’s sales coming from outside of the U.S. currently. Ralph Lauren Corp (NYSE:RL) has stated that their long-term goal is to increase its European and Asian business to the point where each contributes one-third of the company’s total sales. This is ambitious to say the least, and Ralph Lauren Corp (NYSE:RL) seems to be content to grow their business slowly and steadily.

Michael Kors Holdings Ltd (NYSE:KORS), on the other hand, is definitely a growth story. The company’s sales have more than quintupled in the last 5 years, and grew by 67% in the last year alone. Products made by the company, particularly their watches, have become a major fashion trend over the past several years. Unlike Coach, Inc. (NYSE:COH), Michael Kors Holdings Ltd (NYSE:KORS)’ products have not come close to maxing out their growth potential yet, so shares are priced based on what the company could become, not what it is now. With shares trading for 31.8 times TTM earnings, this is certainly the biggest gamble of the group.

Final thoughts

I believe that Coach, Inc. (NYSE:COH) is a great combination of stability and growth and is more than fairly valued at the current share price. Having said that, my attitude towards Coach’s earnings announcements is to wait and see what happens. Who knows, a relatively significant earnings miss could easily create an even better entry point for us!

The article This Fashion Designer Is Cheap, But Should You Jump In? originally appeared on and is written by Matthew Frankel.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach. Matthew is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.