The Coach CEO is Buying

The Coach CEO: On Thursday, Lew Frankfort, Chairman and CEO at Coach, Inc. (NYSE:COH) acquired 21,000 shares of common stock at a price of $48.38 each, for a total transaction worth $1,015,980. With this transaction Mr. Frankfort has allocated a total of 2,053,141 shares of common stock under his direct control, for an estimated capital investment worth $100.7 million.

According to our records, this is Mr. Frankfort’s first transaction for 2013 concerning Coach, Inc. His previous acquisition dates from March 2, 2009, when he purchased 50,000 shares of common stock at a price of $13.24 each, or a total capital investment of $662,000. Hence, at current prices the capital investment has so far appreciated an impressive 77%.

Mr. Frankfort has not been the only one purchasing the stock during the current year. Reed Krakoff, President and Executive Creative Director, reported two purchases during last September. The first transaction was completed on September 4, involved 35,821 shares of common stock for a price of $53.42 each, for a total capital investment of $1,913,557. The second transaction was reported on the following day, and Mr. Krakoff acquired 56,452 shares of common stock at a price of $53.40 each for a transaction worth $3,014,536.

As of today, October 25, 2013, Lone Pine Capital is the hedge fund holding the largest stake at Coach Inc with 5,858,347 shares of common stock, representing a 1.62% of its portfolio. Other important hedge funds are Gates Capital Management and Ariel Investments with 1,193,519 and 928,907 shares of common stock correspondingly.

Coach currently trades at 13.6 times its trailing earnings, carrying a 33% discount to the industry average. Also, cash dividends in the form of quarterly dividends have steadily increased since 2009 and stand today at $0.3375, representing an annual yield of 2.60%.

Disclosure: Jodor Jalit holds no position in any of the mentioned stocks.

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