#3 Michael Kors Holdings Ltd (NYSE:KORS)
– Shares Owned by Greenlight Capital (as of September 30): 7.04 million
– Value of Holding (as of September 30): $297.52 million
Luxury retailer Michael Kors Holdings Ltd (NYSE:KORS) lost almost half of its market capitalization during the first-half of 2015 and didn’t recover in the following months, ending the year 46% in the red. Greenlight almost doubled its position in the company during the third quarter, but the stock inched down by around 2% in the last three months of 2015. In its third-quarter investor letter, Greenlight said that the issues that led to the stock’s weak performance in the first half of 2015 had been fixed and Michael Kors can get back on track and turn back to growth.
“We believe KORS has multiple avenues of continued growth, including its international business and footwear. We established our position at an average price of $45.18, less than 9.5x March 2016 fiscal year earnings estimates net of the $4 per share in cash,” Greenlight said.
Michael Kors Holdings Ltd currently trades at a forward price-to-earnings multiple of 8.08, which might make it look extremely cheap especially when compared to its competitors. The company is expected to report its fiscal-2016-third-quarter earnings early next month and analysts expect EPS of $1.46 on revenue of $1.35 billion, versus EPS of $1.48 on revenue of $1.26 billion it posted for the same period last year.
On January 5, analysts at Wedbush reiterated their ‘Neutral’ rating and $48 price target on the stock. Cliff Asness‘ AQR Capital Management made a 21-fold increase to its stake in Michael Kors Holdings to nearly 2.5 million shares during the third quarter.